Tag Archives: A.R.S. § 33-1806

Aaron Ricks (Somerstone Properties, LLC), v. Montelena Master

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Case Summary

Case ID 21F-H2120024-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-02-16
Administrative Law Judge Tammy L. Eigenheer
Outcome none
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Aaron Ricks (Somerstone Properties, LLC) Counsel —
Respondent Montelena Master Community Association Counsel Troy Stratman

Alleged Violations

A.R.S. § 33-442, A.R.S. § 33-1806

Outcome Summary

The Administrative Law Judge dismissed the Petition because the Petitioner failed to meet the burden of proof to establish that the Montelena Master Community Association violated A.R.S. § 33-442 or its CC&Rs regarding the imposition of a transfer fee. The ALJ found that the use of the fee to fund operating expenses and/or reserves was an acceptable purpose under the relevant statute.

Why this result: Petitioner failed to establish Respondent acted in violation of the community documents and A.R.S. § 33-442.

Key Issues & Findings

Challenge to unauthorized/unlawful transfer fees charged by HOA

Petitioner alleged that the $2500.00 transfer fee charged to the purchaser was an unlawful transfer fee in violation of A.R.S. § 33-442 and specific CC&R provisions, arguing that the authorized use of the fee (Master Association’s operating expenses and/or reserves) was not specific enough to meet the statutory exception under A.R.S. § 33-442(C).

Orders: Petitioner’s petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1806
  • A.R.S. § 33-442
  • A.R.S. § 32-2199
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)

Analytics Highlights

Topics: HOA transfer fee, A.R.S. 33-442, CC&R violation, Operating expenses, Reserves
Additional Citations:

  • A.R.S. § 33-1806
  • A.R.S. § 33-442
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)

Video Overview

Audio Overview

Decision Documents

21F-H2120024-REL Decision – 855401.pdf

Uploaded 2026-01-23T17:36:12 (95.8 KB)

Questions

Question

Who is responsible for proving that an HOA violated the law or community documents during a hearing?

Short Answer

The homeowner (Petitioner) bears the burden of proof.

Detailed Answer

In an administrative hearing, the homeowner filing the petition must prove that the HOA committed the alleged violations. This must be established by a 'preponderance of the evidence,' meaning the homeowner's claims are more likely true than not.

Alj Quote

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

Legal Basis

A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1)

Topic Tags

  • burden of proof
  • legal procedure
  • evidence

Question

Can an HOA charge a transfer fee that is used for general operating expenses rather than a specific project?

Short Answer

Yes, funding operating expenses or reserves is considered a valid purpose.

Detailed Answer

Under Arizona law (A.R.S. § 33-442), transfer fees are generally prohibited unless they fall under specific exceptions. One exception is if the fee is used for a purpose authorized in the document. The ALJ ruled that using fees for 'operating expenses and/or… reserves' satisfies this requirement; it does not need to be for a specific limited purpose like a swimming pool.

Alj Quote

Petitioner offered no authority to support his interpretation that A.R.S. § 33-442 required that the transfer fee had to be for a more specific purpose than those identified in the governing documents.

Legal Basis

A.R.S. § 33-442(C)

Topic Tags

  • transfer fees
  • operating expenses
  • financial management

Question

Can the HOA Board set the amount of a transfer fee without a vote if the CC&Rs allow it?

Short Answer

Yes, if the CC&Rs grant the Board the authority to set the amount.

Detailed Answer

If the community's Declaration of Covenants, Conditions, and Restrictions (CC&Rs) specifically states that the transfer fee amount is 'to be set by the Board' or established 'from time to time by the Board,' the Board has the authority to determine the fee amount.

Alj Quote

The Master Association may require the new Owner of a Lot or Parcel to pay to the Master Association, or its designated representative, a transfer fee in an amount to be set by the Board . . . .

Legal Basis

CC&Rs Section 6.6; CC&Rs Section 7.15

Topic Tags

  • board authority
  • CC&Rs
  • fees

Question

Can an HOA charge both a Transfer Fee and a Reserve Contribution fee on the same sale?

Short Answer

Yes, an HOA can charge multiple distinct fees if authorized by the governing documents.

Detailed Answer

The ALJ found that a Transfer Fee can be charged in addition to other fees, such as a Reserve Contribution, provided the governing documents (like a Board Resolution or CC&Rs) explicitly state that the fee is in addition to other assessments.

Alj Quote

This Transfer Fee shall be in addition to any other fees and assessments due and payable in relation to the transfer of the property, including, but not limited to, a Reserve Contribution pursuant to Article 6, Section 6.9 of the Declaration.

Legal Basis

Board Resolution (Recorded July 23, 2010)

Topic Tags

  • reserve contribution
  • transfer fees
  • closing costs

Question

What does 'preponderance of the evidence' mean in an HOA dispute?

Short Answer

It means the evidence shows a claim is more probably true than not.

Detailed Answer

This legal standard requires the party with the burden of proof to provide evidence that has 'superior evidentiary weight.' It does not mean removing all doubt, but rather sufficient evidence to incline a fair mind to one side over the other.

Alj Quote

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

Legal Basis

Arizona Law of Evidence § 5

Topic Tags

  • legal definitions
  • evidence
  • standard of proof

Question

Is a transfer fee valid if I purchased the property out of bankruptcy?

Short Answer

Yes, if the CC&Rs require payment immediately upon becoming the owner.

Detailed Answer

The manner of purchase (e.g., out of bankruptcy) does not automatically exempt an owner from transfer fees if the CC&Rs mandate that 'Each person or entity who purchases a Lot… shall pay… immediately upon becoming the Owner.'

Alj Quote

Therefore, Respondent was able to charge Petitioner the transfer fee pursuant to his purchase of the property out of bankruptcy.

Legal Basis

CC&Rs Section 7.15

Topic Tags

  • bankruptcy
  • property transfer
  • exemptions

Case

Docket No
21F-H2120024-REL
Case Title
Aaron Ricks (Somerstone Properties, LLC) v. Montelena Master Community Association
Decision Date
2021-02-16
Alj Name
Tammy L. Eigenheer
Tribunal
OAH
Agency
ADRE

Questions

Question

Who is responsible for proving that an HOA violated the law or community documents during a hearing?

Short Answer

The homeowner (Petitioner) bears the burden of proof.

Detailed Answer

In an administrative hearing, the homeowner filing the petition must prove that the HOA committed the alleged violations. This must be established by a 'preponderance of the evidence,' meaning the homeowner's claims are more likely true than not.

Alj Quote

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

Legal Basis

A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1)

Topic Tags

  • burden of proof
  • legal procedure
  • evidence

Question

Can an HOA charge a transfer fee that is used for general operating expenses rather than a specific project?

Short Answer

Yes, funding operating expenses or reserves is considered a valid purpose.

Detailed Answer

Under Arizona law (A.R.S. § 33-442), transfer fees are generally prohibited unless they fall under specific exceptions. One exception is if the fee is used for a purpose authorized in the document. The ALJ ruled that using fees for 'operating expenses and/or… reserves' satisfies this requirement; it does not need to be for a specific limited purpose like a swimming pool.

Alj Quote

Petitioner offered no authority to support his interpretation that A.R.S. § 33-442 required that the transfer fee had to be for a more specific purpose than those identified in the governing documents.

Legal Basis

A.R.S. § 33-442(C)

Topic Tags

  • transfer fees
  • operating expenses
  • financial management

Question

Can the HOA Board set the amount of a transfer fee without a vote if the CC&Rs allow it?

Short Answer

Yes, if the CC&Rs grant the Board the authority to set the amount.

Detailed Answer

If the community's Declaration of Covenants, Conditions, and Restrictions (CC&Rs) specifically states that the transfer fee amount is 'to be set by the Board' or established 'from time to time by the Board,' the Board has the authority to determine the fee amount.

Alj Quote

The Master Association may require the new Owner of a Lot or Parcel to pay to the Master Association, or its designated representative, a transfer fee in an amount to be set by the Board . . . .

Legal Basis

CC&Rs Section 6.6; CC&Rs Section 7.15

Topic Tags

  • board authority
  • CC&Rs
  • fees

Question

Can an HOA charge both a Transfer Fee and a Reserve Contribution fee on the same sale?

Short Answer

Yes, an HOA can charge multiple distinct fees if authorized by the governing documents.

Detailed Answer

The ALJ found that a Transfer Fee can be charged in addition to other fees, such as a Reserve Contribution, provided the governing documents (like a Board Resolution or CC&Rs) explicitly state that the fee is in addition to other assessments.

Alj Quote

This Transfer Fee shall be in addition to any other fees and assessments due and payable in relation to the transfer of the property, including, but not limited to, a Reserve Contribution pursuant to Article 6, Section 6.9 of the Declaration.

Legal Basis

Board Resolution (Recorded July 23, 2010)

Topic Tags

  • reserve contribution
  • transfer fees
  • closing costs

Question

What does 'preponderance of the evidence' mean in an HOA dispute?

Short Answer

It means the evidence shows a claim is more probably true than not.

Detailed Answer

This legal standard requires the party with the burden of proof to provide evidence that has 'superior evidentiary weight.' It does not mean removing all doubt, but rather sufficient evidence to incline a fair mind to one side over the other.

Alj Quote

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

Legal Basis

Arizona Law of Evidence § 5

Topic Tags

  • legal definitions
  • evidence
  • standard of proof

Question

Is a transfer fee valid if I purchased the property out of bankruptcy?

Short Answer

Yes, if the CC&Rs require payment immediately upon becoming the owner.

Detailed Answer

The manner of purchase (e.g., out of bankruptcy) does not automatically exempt an owner from transfer fees if the CC&Rs mandate that 'Each person or entity who purchases a Lot… shall pay… immediately upon becoming the Owner.'

Alj Quote

Therefore, Respondent was able to charge Petitioner the transfer fee pursuant to his purchase of the property out of bankruptcy.

Legal Basis

CC&Rs Section 7.15

Topic Tags

  • bankruptcy
  • property transfer
  • exemptions

Case

Docket No
21F-H2120024-REL
Case Title
Aaron Ricks (Somerstone Properties, LLC) v. Montelena Master Community Association
Decision Date
2021-02-16
Alj Name
Tammy L. Eigenheer
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Aaron Ricks (petitioner)
    Somerstone Properties, LLC

Respondent Side

  • Troy Stratman (HOA attorney)
    Stratman Law Firm, PLC

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Brad W. Stevens vs. Mogollon Aripark, Inc.,

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Case Summary

Case ID 18F-H1818029-REL-RHG, 18F-H1818045-REL, 18F-H1818054-REL, 18F-H1818054-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2019-03-01
Administrative Law Judge Thomas Shedden
Outcome partial
Filing Fees Refunded $1,500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Warren R. Brown Counsel —
Respondent Mogollon Airpark, Inc. Counsel Gregory A. Stein, Esq.; Mark K. Sahl, Esq.

Alleged Violations

A.R.S. § 33-1803(A)
A.R.S. § 33-1803(A)
A.R.S. § 33-1803(A)

Outcome Summary

The ALJ ruled that Mogollon Airpark, Inc. violated A.R.S. § 33-1803(A) by charging a $25 late fee, as the statutory limit applies to all assessments,. However, the ALJ found no violation regarding the $325 assessment increase because the $209 portion was a special assessment and the remaining regular increase did not exceed the 20% limit,,.

Why this result: The Petitioners' primary loss on the assessment cap issue was due to a failed legal interpretation that 'regular assessment' encompasses all assessments, a view the ALJ found would render statutory language redundant,.

Key Issues & Findings

Challenge to $325 Assessment Increase (Docket 029-RHG)

Petitioner Brown argued that 'regular assessment' refers to the procedure (motion, second, vote) and thus the entire $325 increase should be subject to the 20% cap,. The ALJ rejected this, finding that $116 was a regular increase (14.1%) and $209 was a special assessment, to which the cap did not apply,.

Orders: Petition in Docket No. 18F-H1818029-REL-RHG is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1803(A)
  • Deer Valley v. Houser

Excessive Late Fee and Interest (Docket 045)

Petitioner Brown alleged that the $25 late charge and interest rate exceeded the limits of A.R.S. § 33-1803(A). The ALJ ruled that the statutory limit on late fees applies to all 'assessments', not just 'regular assessments', and found the HOA in violation,.

Orders: Respondent must rescind the $25 late fee and pay Petitioner his $500 filing fee within thirty days.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1803(A)
  • U.S. Parking Sys v. City of Phoenix

Challenge to $325 Assessment Increase (Docket 054 & Rehearing)

Petitioner Stevens argued the entire $325 must be a regular assessment because the HOA lacked authority to impose special assessments or used deceptive accounting to justify the increase,,. The ALJ found that 'regular assessment' is a specific type of assessment and the $116 increase (14.1%) did not exceed the cap,,.

Orders: Petition in Docket No. 18F-H1818054-REL and the subsequent rehearing are dismissed,.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1803(A)
  • A.R.S. § 33-1806
  • Northwest Fire District v. U.S. Home of Arizona

Analytics Highlights

Topics: Assessment Increase Cap, Regular Assessment vs Special Assessment, Late Fee Limit, Statutory Construction, Accounting Impropriety Allegations, Rehearing, Consolidated Matter
Additional Citations:

  • A.R.S. § 33-1803(A)
  • A.R.S. § 33-1806
  • A.R.S. § 32-2199.02(B)
  • A.R.S. Title 32, Ch. 20, Art. 11
  • A.A.C. § R2-19-119
  • Deer Valley v. Houser, 214 Ariz. 293, 296, 152 P.3d 490, 493 (2007)
  • U.S. Parking Sys v. City of Phoenix, 160 Ariz. 210, 211, 772 P.2d 33, 34 (App. 1989)
  • McNally v. Sun Lakes Homeowners Ass’n #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (2016 App.)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • Gutierrez v. Industrial Commission of Arizona
  • State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968)
  • Northwest Fire District v. U.S. Home of Arizona, 215 Ariz. 492 (2007)

Decision Documents

18F-H1818054-REL Decision – 666285.pdf

Uploaded 2025-12-19T15:21:24 (151.9 KB)

18F-H1818054-REL Decision – 672623.pdf

Uploaded 2025-12-19T15:21:25 (144.6 KB)

Case Participants

Petitioner Side

  • Warren R. Brown (petitioner)
    Appeared on his own behalf
  • Brad W. Stevens (petitioner)
    Appeared on his own behalf and testified

Respondent Side

  • Gregory A. Stein (respondent attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Counsel for Respondent, referred to as Greg Stein in rehearing
  • Mark K. Sahl (respondent attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Counsel for Respondent (also spelled Sahl/Saul)

Neutral Parties

  • Thomas Shedden (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
  • Felicia Del Sol (staff/clerk)
    Transmitting staff

Varhely, Emry & Muriel vs. Eighth Street Townhouse Association

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Case Summary

Case ID 12F-H1213009-BFS
Agency Department of Fire, Building and Life Safety
Tribunal OAH
Decision Date 2013-03-01
Administrative Law Judge Tammy L. Eigenheer
Outcome no
Filing Fees Refunded $550.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Emry & Muriel Varhely Counsel —
Respondent Eighth Street Square Townhouse Association Counsel Nikita Patel

Alleged Violations

A.R.S. § 33-1806

Outcome Summary

The ALJ dismissed the petition because the Respondent, having fewer than 50 units, was not statutorily required to provide the specific disclosure statement regarding unit alterations or improvements that the Petitioners claimed was missing.

Why this result: The Respondent successfully established that it governs a community with fewer than 50 units, which exempted it from the specific disclosure requirement alleged by the Petitioners.

Key Issues & Findings

Failure to provide statement regarding existing violations at sale

Petitioners alleged the HOA violated A.R.S. § 33-1806 by failing to provide a statement as to whether association records reflected any alterations or improvements to the unit that violated the declaration prior to closing escrow.

Orders: The Petition is dismissed; no action is required of Respondent.

Filing fee: $550.00, Fee refunded: No

Disposition: respondent_win

Decision Documents

12F-H1213009-BFS Decision – 327965.pdf

Uploaded 2026-01-25T15:28:22 (86.7 KB)

12F-H1213009-BFS Decision – 333516.pdf

Uploaded 2026-01-25T15:28:23 (57.9 KB)

**Case Summary: Varhely v. Eighth Street Square Townhouse Association**
**Case No:** 12F-H1213009-BFS
**Forum:** Office of Administrative Hearings, State of Arizona

**Proceedings and Parties**
This administrative hearing, held on February 13, 2013, involved a dispute between home buyers Emry and Muriel Varhely (Petitioners) and the Eighth Street Square Townhouse Association (Respondent). The Petitioners appeared on their own behalf, while the Respondent was represented by counsel.

**Key Facts**
* **The Purchase:** In February 2012, Petitioners entered a contract to buy a unit in the Eighth Street Square community, which was owned by ING Bank FSB following a foreclosure.
* **Community Size:** The planned community consists of 48 units.
* **Disclosure Dispute:** On March 13, 2012, the Respondent provided information to the escrow company indicating violations existed. However, the Petitioners claimed that prior to closing escrow on that same day, they did not receive a specific statement from the Association regarding alterations or improvements that violated the Declaration.
* **The Allegation:** Petitioners filed a complaint alleging the Association violated A.R.S. § 33-1806 by failing to notify them of existing violations at the time of purchase.

**Main Arguments**
* **Petitioners' Argument:** The Petitioners argued that because the Respondent provided some documents required under the statute, it was obligated to provide all of them, including the statement on violations. They contended they relied on the documents provided and that since the seller (the bank) likely lacked knowledge of the violations, the Association was responsible for notifying them.
* **Respondent's Defense:** The Association maintained that because the community contained fewer than 50 units, the specific statutory requirement for the Association to provide a statement regarding existing violations did not apply.

**Legal Analysis and Findings**
The Administrative Law Judge (ALJ) focused on the specific applicability of A.R.S. § 33-1806 regarding community size.

1. **Statutory Distinction:** The ALJ noted that for planned communities with *fewer than 50 units*, A.R.S. § 33-1806(A) directs that a "member" (seller) shall mail or deliver the required disclosures to the purchaser.
2. **Association's Obligation:** The Judge clarified that if the community had 50 or more units, the Association would have been required to provide an affirmative statement regarding violations. However, because Eighth Street Square has only 48 units, the Respondent had no obligation under the statute to notify the Petitioners of the known violation, regardless of whether the seller knew of the violation or whether the Association provided other documents.
3. **Burden of Proof:** The Petitioners failed to meet the burden of proving by a preponderance of the evidence that the Respondent violated the statute.

**Final Decision and Outcome**
* **Ruling:** The ALJ ordered that the Petition be dismissed, concluding that no action was required of the Respondent.
* **Certification:** The Department of Fire, Building and Life Safety took no action to modify or reject the decision within the statutory timeframe. Consequently, the ALJ’s decision was certified as the final administrative decision on April 10, 2013.

Case Participants

Petitioner Side

  • Emry Varhely (petitioner)
    Spelled 'Varhaly' in Source 2 mailing list
  • Muriel Varhely (petitioner)
    Appeared on behalf of Petitioners

Respondent Side

  • Nikita Patel (attorney)
    Carpenter, Hazlewood, Delgado & Bolen, PLC
    Represented Respondent

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
  • Gene Palma (Director)
    Department of Fire, Building and Life Safety
  • Cliff J. Vanell (Director)
    Office of Administrative Hearings
    Signed Certification of Decision
  • Joni Cage (administrative staff)
    Department of Fire, Building and Life Safety
    Listed c/o for Gene Palma

Sellers, John & Debborah vs. Crossings at Willow Creek Property Owners Association

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Case Summary

Case ID 12F-H1213003-BFS
Agency DFBLS
Tribunal OAH
Decision Date 2013-01-23
Administrative Law Judge Tammy L. Eigenheer
Outcome no
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner John and Debborah Sellers Counsel —
Respondent Crossings at Willow Creek Property Owners Association Counsel —

Alleged Violations

A.R.S. § 33-1806

Outcome Summary

The ALJ dismissed the case because the Petitioners were not the buyers or sellers in the transaction where the alleged disclosure failure occurred, and thus lacked standing to sue.

Why this result: Petitioners lacked standing as they were not parties to the transaction.

Key Issues & Findings

Failure to provide disclosure documents

Petitioners alleged that the Respondent failed to properly disclose information required under A.R.S. § 33-1806 to a purchaser of a lot in the planned community.

Orders: The petition was dismissed because the Petitioners lacked standing.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Decision Documents

12F-H1213003-BFS Decision – 322099.pdf

Uploaded 2026-01-25T15:27:48 (70.7 KB)

12F-H1213003-BFS Decision – 327761.pdf

Uploaded 2026-01-25T15:27:48 (59.6 KB)

**Case Title:** *John and Debborah Sellers v. Crossings at Willow Creek Property Owners Association*
**Case Number:** 12F-H1213003-BFS

**Summary of Proceedings**
On August 7, 2012, John and Debborah Sellers (Petitioners) filed a petition with the Arizona Department of Fire, Building and Life Safety alleging that the Crossings at Willow Creek Property Owners Association (Respondent) violated A.R.S. § 33-1806. The Petitioners claimed the Respondent failed to properly disclose required information to a purchaser of a lot within the planned community,.

The matter was assigned to Administrative Law Judge (ALJ) Tammy L. Eigenheer at the Office of Administrative Hearings. Although a hearing was initially scheduled, the ALJ identified a preliminary issue regarding the Petitioners' standing to bring the case. Consequently, the ALJ ordered a pre-hearing conference and oral arguments, which took place on December 12, 2012.

**Key Facts and Legal Arguments**
The central legal issue was whether the Petitioners had standing to file a complaint regarding a real estate transaction to which they were not a party.
* **Petitioners' Admissions:** During the pre-hearing conference, the Petitioners acknowledged they were neither buyers nor sellers in the transaction in question. Furthermore, they admitted they suffered no harm from the Respondent’s alleged failure to provide documents to the actual purchaser.
* **Legal Standing:** The ALJ analyzed the case under A.R.S. § 41-2198.01(B), which regulates disputes between owners and associations. The ALJ determined that because the Petitioners were not parties to the transaction, they did not have a "dispute" with the Respondent within the meaning of the statute. Consequently, they lacked the necessary standing to proceed with a hearing on the merits regarding the alleged violation of A.R.S. § 33-1806.

**Outcome and Final Decision**
On January 23, 2013, the ALJ issued a decision dismissing the petition because the Petitioners failed to demonstrate standing upon which relief could be granted,. The Order stated that no action was required of the Respondent.

The Department of Fire, Building and Life Safety did not accept, reject, or modify the decision within the statutory review period,. Therefore, on February 28, 2013, the Director of the Office of Administrative Hearings certified the ALJ's decision as the final administrative decision.

Case Participants

Petitioner Side

  • John Sellers (petitioner)
    Appeared on own behalf
  • Debborah Sellers (petitioner)
    Appeared on own behalf

Respondent Side

  • Peter Giambanco (Board President)
    Crossings at Willow Creek Property Owners Association
    Represented Respondent

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
  • Gene Palma (Director)
    Department of Fire, Building and Life Safety
  • Holly Textor (staff)
    Department of Fire, Building and Life Safety
    Recipient of transmission
  • Cliff J. Vanell (Director)
    Office of Administrative Hearings
    Certified the decision
  • Joni Cage (staff)
    Department of Fire, Building and Life Safety
    Recipient of copy

Sallus, Suzanne vs. Sunrise Desert Vistas POA

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Case Summary

Case ID 12F-H1212008-BFS
Agency Department of Fire, Building and Life Safety
Tribunal Office of Administrative Hearings
Decision Date 2012-10-02
Administrative Law Judge Tammy L. Eigenheer
Outcome yes
Filing Fees Refunded $550.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Suzanne Sallus Counsel M. Philip Escolar
Respondent Sunrise Desert Vistas Property Owners Association Counsel —

Alleged Violations

A.R.S. § 33-1806

Outcome Summary

The Administrative Law Judge ruled in favor of the Petitioner, finding that the HOA violated A.R.S. § 33-1806 by failing to provide legally required resale disclosure documents directly to the purchaser within the statutory timeframe. The HOA's reliance on its website was deemed insufficient as the website did not contain all required information (specifically regarding financials and pending litigation).

Key Issues & Findings

Failure to provide resale disclosure documents

Petitioner alleged Respondent failed to provide required documents upon pending sale of the property. Respondent argued directing the title agent to the website was sufficient. The ALJ found the website did not contain all required documents and that Respondent failed to disclose pending litigation.

Orders: Respondent ordered to comply with A.R.S. § 33-1806 and provide copies of all required documents within 10 days; Respondent ordered to pay Petitioner filing fee of $550.00.

Filing fee: $550.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1806
  • A.R.S. § 41-2198.01(B)

Decision Documents

12F-H1212008-BFS Decision – 308830.pdf

Uploaded 2026-01-25T15:26:57 (122.1 KB)

12F-H1212008-BFS Decision – 313396.pdf

Uploaded 2026-01-25T15:26:58 (59.0 KB)

**Case Title:** *Suzanne Sallus v. Sunrise Desert Vistas POA*
**Case Number:** 12F-H1212008-BFS
**Forum:** Arizona Office of Administrative Hearings

### **Proceedings and Key Facts**
On September 12, 2012, Administrative Law Judge Tammy L. Eigenheer presided over a hearing regarding a petition filed by Suzanne Sallus (Petitioner) against the Sunrise Desert Vistas Property Owners Association (Respondent). The dispute arose from Petitioner's purchase of a property within the community in early 2011.

Petitioner alleged that Respondent violated A.R.S. § 33-1806 by failing to provide required disclosure documents within ten days of receiving notice of the pending sale,. On March 12, 2011, Petitioner's title agency contacted Respondent requesting information on fees and assessments. Respondent replied by email providing assessment figures and directing the agent to the association's website for the CC&Rs and Bylaws. Escrow closed on April 2, 2011, without Petitioner receiving the full statutory disclosures,.

### **Main Legal Issues and Arguments**
The central legal question was whether Respondent’s actions satisfied the disclosure requirements of A.R.S. § 33-1806.

* **Adequacy of Electronic Delivery:** Respondent argued that directing Petitioner’s agent to the association's website satisfied the requirement to provide documents in "paper or electronic format". The Administrative Law Judge (ALJ) rejected this argument because the website did not contain all required documents. Specifically, the website's "Financials" page merely stated that reports were available "on request," which did not meet the statutory obligation to deliver the current operating budget and most recent annual financial report.

* **Missing Statements:** Respondent admitted it failed to provide a dated statement containing mandatory disclosures, including insurance coverage details, reserve amounts, and a statement regarding alteration violations.

* **Pending Litigation Disclosure:** A.R.S. § 33-1806 requires associations to summarize pending lawsuits. Respondent argued that two lawsuits (*Violette* and *Given*) did not need to be disclosed because settlement agreements were signed in February 2011. However, the ALJ determined that because the official dismissals for these cases were not entered by the Superior Court until March 16 and March 21, 2011—after Respondent received notice of the sale—the lawsuits were legally "pending" and should have been disclosed.

### **Final Decision and Outcome**
The ALJ ruled in favor of Petitioner, concluding that she established by a preponderance of the evidence that Respondent violated A.R.S. § 33-1806,.

**The Order required Respondent to:**
1. Comply with the statute and provide Petitioner with copies of all required documents within ten days.
2. Reimburse Petitioner the $550.00 filing fee within 30 days.

The decision was certified as the final administrative decision of the Department of Fire, Building and Life Safety on November 8, 2012, after the Department took no action to reject or modify the ALJ's ruling,.

Case Participants

Petitioner Side

  • Suzanne Sallus (Petitioner)
    Sallus Family Trust
    Served as member of SDV Board of Directors from May 2011 through April 2012
  • M. Philip Escolar (attorney)
    Escolar Law Office
    Represented Petitioner

Respondent Side

  • Grace Violette (board member)
    Sunrise Desert Vistas Property Owners Association
    President of Respondent; represented Respondent at hearing; also named in separate lawsuit dismissed March 2011

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
  • Gene Palma (Director)
    Department of Fire, Building and Life Safety
  • Cliff J. Vanell (Director)
    Office of Administrative Hearings
    Certified the ALJ decision
  • Holly Textor (agency staff)
    Department of Fire, Building and Life Safety
    Listed on mailing distribution