Briefing Document: Garcia v. Villagio at Tempe Homeowners Association

Executive Summary

This document synthesizes two Administrative Law Judge Decisions concerning a dispute between homeowner Rogelio A. Garcia (Petitioner) and the Villagio at Tempe Homeowners Association (Respondent). The core of the case is Mr. Garcia’s allegation that the HOA violated Arizona Revised Statute (A.R.S.) § 33-1242 by failing to follow specific procedures after issuing notices for a violation of its short-term rental policy.

The Administrative Law Judge ultimately dismissed Mr. Garcia’s petition in both an initial hearing and a subsequent rehearing. The central finding was that Mr. Garcia failed to meet a critical prerequisite outlined in the statute: he did not respond to the violation notices by certified mail within the 21-day period. This failure meant that the HOA’s corresponding statutory obligations—such as providing the name of the person who observed the violation—were never triggered.

Furthermore, the judge determined that the HOA was not required to inform Mr. Garcia of his right to an administrative hearing because the violation notices themselves included instructions on the HOA’s internal process for contesting the matter. Mr. Garcia’s argument that the HOA’s rapid issuance of fines and subsequent notices prevented him from responding was found to be unsubstantiated by evidence. The decisions underscore a strict interpretation of the statute, placing the initial burden of response on the unit owner.

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I. Case Overview

This matter was adjudicated by the Arizona Office of Administrative Hearings after a petition was filed with the Arizona Department of Real Estate. The case involved an initial hearing and a rehearing requested by the Petitioner.

Entity / Individual

Petitioner

Rogelio A. Garcia

Respondent

Villagio at Tempe Homeowners Association (“Villagio”)

Respondent’s Counsel

Nathan Tennyson, Esq.

Adjudicating Body

Office of Administrative Hearings

Administrative Law Judge

Velva Moses-Thompson

Case Number (Initial)

19F-H1918009-REL

Case Number (Rehearing)

19F-H1918009-REL-RHG

Core Allegation

Violation of A.R.S. § 33-1242 by the Respondent.

II. Chronology of Events

• March 8, 2018: Villagio mails the first letter to Mr. Garcia, alleging a violation of short-term lease provisions in the community’s Covenants, Conditions, and Restrictions (CC&Rs). The letter instructs him to file an appeal with the Board of Directors within 10 days of receipt.

• March 22, 2018: Villagio mails a second notice for the same violation, informing Mr. Garcia that a $1,000 fine has been posted to his account. This notice also contains instructions for contesting the violation.

• April 5, 2018: Villagio mails a third notice, informing Mr. Garcia that a $2,000 fine has been posted to his account for the continuing violation.

• Response from Garcia: Mr. Garcia did not respond to any of the three notices within the 21-calendar-day period specified by statute. He did, at some point, file an appeal directly with Villagio, which held a hearing but did not change its position.

• August 17, 2018 (approx.): Mr. Garcia files a petition with the Arizona Department of Real Estate, formally initiating the administrative hearing process.

• October 30, 2018: The first evidentiary hearing is held before Administrative Law Judge Velva Moses-Thompson.

• November 19, 2018: The initial Administrative Law Judge Decision is issued, dismissing Mr. Garcia’s petition.

• January 3, 2019 (approx.): The Arizona Department of Real Estate issues an order setting a rehearing for the matter, following a request from Mr. Garcia.

• February 12, 2019: The rehearing is held. Mr. Garcia testifies on his own behalf, and Villagio presents testimony from Community Manager Tom Gordon.

• March 4, 2019: The final Administrative Law Judge Decision is issued, again dismissing Mr. Garcia’s petition.

III. Central Legal Issue: Interpretation of A.R.S. § 33-1242

The entire dispute centered on the procedural requirements laid out in A.R.S. § 33-1242, which governs how an HOA must handle notices of violation to a unit owner. The key provisions are:

• Unit Owner’s Responsibility (Subsection B): A unit owner who receives a written notice of violation may provide the association with a written response. This response must be sent by certified mail within twenty-one calendar days after the date of the notice.

• Association’s Obligations upon Response (Subsection C): Within ten business days after receiving the certified mail response, the association must provide a written explanation that includes:

1. The specific provision of the condominium documents allegedly violated.

2. The date the violation occurred or was observed.

3. The first and last name of the person(s) who observed the violation.

4. The process the unit owner must follow to contest the notice.

• Association’s Obligation Regarding Administrative Hearings (Subsection D): An association must provide written notice of the owner’s option to petition for an administrative hearing with the state real estate department unless the information required in Subsection C, paragraph 4 (the contest process) is provided in the initial notice of violation.

IV. Analysis of Arguments and Evidence

Petitioner’s Position (Rogelio A. Garcia)

Mr. Garcia’s arguments, presented across both hearings, focused on three primary claims of statutory violation by Villagio:

1. Failure to Provide Required Information: Villagio violated the statute by not providing him with the first and last name of the person who observed the violation.

2. Failure to Notify of Hearing Rights: Villagio did not inform him of his right to petition for an administrative hearing with the state real estate department.

3. Prevention of Response: Mr. Garcia contended that Villagio effectively prevented him from responding via certified mail within the 21-day statutory period. He argued that the notices’ demand for compliance within 10 days, combined with the issuance of a second notice and a fine just 14 days after the first, led him to believe he only had 10 days to act before incurring another violation.

Respondent’s Position (Villagio at Tempe HOA)

Villagio presented a defense based on a direct reading of the statute and Mr. Garcia’s inaction:

1. Statutory Obligations Not Triggered: Villagio’s central argument was that its obligations under A.R.S. § 33-1242(C)—including the duty to name the observer—are only triggered after a unit owner submits a written response by certified mail within 21 days. Since Mr. Garcia never sent such a response, these obligations never came into effect.

2. Internal Contest Process Satisfied Statute: Per A.R.S. § 33-1242(D), the duty to notify an owner of their right to an administrative hearing only applies if the HOA fails to provide its own contest process. Villagio argued that because all three notices explicitly stated the process for appealing to the Board of Directors, it had fulfilled its statutory duty.

3. No Prevention of Response: Mr. Garcia was never legally or physically prevented from sending a certified letter. During cross-examination, he admitted he was not under any court order prohibiting him from responding.

4. Statute Inapplicability (Argument from Rehearing): Villagio further contended that A.R.S. § 33-1242 applies specifically to violations concerning the “condition of the property,” not the “use” of the property. Since short-term renting is a use, Villagio argued the statute did not apply to this situation at all.

Key Testimony from Rehearing

During the February 12, 2019 rehearing, Villagio’s Community Manager, Tom Gordon, testified.

• On direct examination, Mr. Gordon stated that Villagio does not restrict homeowners from responding to violation notices within the 21-day period.

• On cross-examination, when asked by Mr. Garcia if Villagio would have abided by “this statute” had he responded in 21 days, Mr. Gordon replied, “No.” He explained this by stating that homeowners are given 10 days to contest a notice with Villagio pursuant to its own short-term rental policy.

V. Administrative Law Judge’s Decisions and Rationale

The judge’s findings were consistent across both the initial decision and the rehearing decision, leading to the same conclusion in each instance.

Initial Decision (November 19, 2018)

• Finding of Fact: It was undisputed that Mr. Garcia did not respond to the March 8, March 22, or April 5, 2018 notices within 21 calendar days.

• Conclusion 1: Because Mr. Garcia did not respond within the 21-day period, Villagio was not required to provide him with the first and last name of the person(s) who observed the violation.

• Conclusion 2: Because Villagio notified Mr. Garcia of the process for contesting the notice, it was not required under A.R.S. § 33-1242(D) to provide him with notice of the right to petition for an administrative hearing.

• Outcome: Mr. Garcia failed to establish by a preponderance of the evidence that a violation occurred. The petition was dismissed.

Rehearing Decision (March 4, 2019)

The judge reaffirmed the initial findings and addressed Mr. Garcia’s argument that he was prevented from responding.

• Finding on “Prevention”: The judge found no evidence that Villagio informed Mr. Garcia he could not respond within 21 days or otherwise prevented him from doing so. The issuance of a second notice 14 days after the first was not deemed a preventative act that nullified Mr. Garcia’s statutory window to respond to the first notice.

• Statutory Construction: The decision invoked the legal principle that “what the Legislature means, it will say,” indicating a strict, literal interpretation of the statute’s requirements.

• Reaffirmed Conclusions: The judge again concluded that because Mr. Garcia failed to submit a written response by certified mail, Villagio’s obligations under A.R.S. § 33-1242(C) were not triggered, and its inclusion of an internal appeal process satisfied the requirements of A.R.S. § 33-1242(D).

• Outcome: Mr. Garcia’s petition was dismissed for a second time, with Villagio deemed the prevailing party.

VI. Final Disposition

The Administrative Law Judge ordered that Mr. Garcia’s petition be dismissed. The decision issued after the rehearing on March 4, 2019, is binding on the parties. Any party wishing to appeal the order must seek judicial review with the superior court within thirty-five days from the date the order was served.