Case Summary
| Case ID |
19F-H1919044-REL |
| Agency |
ADRE |
| Tribunal |
OAH |
| Decision Date |
2019-05-07 |
| Administrative Law Judge |
Thomas Shedden |
| Outcome |
partial |
| Filing Fees Refunded |
$0.00 |
| Civil Penalties |
$500.00 |
Parties & Counsel
| Petitioner |
Pointe Tapatio Community Association |
Counsel |
Lauren Vie |
| Respondent |
Lanye C. Wilkey and Devin E. Wilkey |
Counsel |
Joseph Velez |
Alleged Violations
CC&R Article 3, section 3.1
Outcome Summary
The ALJ found that the Respondents violated the CC&Rs by operating a business that created traffic and parking. The Respondents were ordered to cease business operations and pay a $500.00 civil penalty. The Petitioner's request for a refund of its filing fee was denied.
Why this result: Petitioner's request for refund of the filing fee was denied because they cited no authority showing that the refund was within the tribunal’s authority.
Key Issues & Findings
Violation of Residential Use covenant prohibiting traffic/parking generation by business
The Petitioner HOA alleged that the Respondents, co-owners of the unit, violated CC&Rs Article 3, section 3.1 by operating a payroll processing company out of the unit. The ALJ found that the business required two employees to drive to the unit daily, thereby creating traffic and parking, which clearly and unambiguously violates the CC&R provision prohibiting non-residential use that creates traffic or parking.
Orders: Respondents were ordered to cease business operations at the unit (720 E. North Lane, Unit 1) within thirty-five days to comply with CC&R Article 3, section 3.1, and pay a civil penalty of $500.00 to the Department of Real Estate within sixty days. The Petitioner's request for refund of the filing fee was denied.
Filing fee: $0.00, Fee refunded: No, Civil penalty: $500.00
Disposition: petitioner_win
Cited:
- ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
- ARIZ. ADMIN. CODE § R2-19-119
- BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
- Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
- Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
- Grubb & Ellis Management Services, Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, 138 P.3d 1210 (App. 2006)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. section 32-2199.04
- ARIZ. REV. STAT. section 41-1092.09
Analytics Highlights
Topics: HOA, CC&Rs, Business Use, Home Business, Parking, Traffic, Civil Penalty
Additional Citations:
- ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
- ARIZ. ADMIN. CODE § R2-19-119
- BLACK’S LAW DICTIONARY 1373 (10th ed. 2014)
- Johnson v. The Pointe Community Association, 205 Ariz. 485, 73 P.3d 616 (App. 2003)
- Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
- Grubb & Ellis Management Services, Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, 138 P.3d 1210 (App. 2006)
- ARIZ. REV. STAT. § 32-2199.02
- ARIZ. REV. STAT. section 32-2199.04
- ARIZ. REV. STAT. section 41-1092.09
Decision Documents
19F-H1919044-REL Decision – /home/jeremy/azhoa/repos/azoah_decisions/portal_documents/19F-H1919044-REL-RHG/733509.pdf
Uploaded 2026-04-17T05:44:04 (38.6 KB)
19F-H1919044-REL Decision – /home/jeremy/azhoa/repos/azoah_decisions/portal_documents/19F-H1919044-REL/706518.pdf
Uploaded 2026-04-17T05:44:08 (36.5 KB)
19F-H1919044-REL Decision – /home/jeremy/azhoa/repos/azoah_decisions/portal_documents/19F-H1919044-REL/706560.pdf
Uploaded 2026-04-17T05:44:11 (108.8 KB)
19F-H1919044-REL Decision – 706518.pdf
Uploaded 2026-01-23T17:28:45 (36.5 KB)
19F-H1919044-REL Decision – 706560.pdf
Uploaded 2026-01-23T17:28:49 (108.8 KB)
Administrative Hearing Briefing: Pointe Tapatio Community Association vs. Wilkey
Executive Summary
This document details the findings and decision of an administrative law judge in the case of Pointe Tapatio Community Association versus residents Layne C. and Devin E. Wilkey. The core issue was the operation of a payroll processing company, Devau Human Resources, from the Wilkeys’ residential unit. The Association alleged this violated community CC&Rs, which prohibit non-residential uses that create traffic or parking. The Wilkeys admitted that two employees commuted to the unit daily but argued they had received permission from a former property manager.
The judge found in favor of the Association, concluding that the daily commute of two employees constituted the creation of “traffic and parking,” a direct and unambiguous violation of the CC&Rs. The judge deemed the residents’ claims of verbal permission to be unsubstantiated and irrelevant, as the covenant’s language was clear. Consequently, the judge ordered the Wilkeys to cease all business operations at the unit within 35 days and imposed a civil penalty of $500.
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Case Overview
Case Name
Pointe Tapatio Community Association, Petitioner, vs. Lanye C. Wilkey and Devin E. Wilkey, Respondent.
Case Number
19F-H1919044-REL
Jurisdiction
Office of Administrative Hearings (Arizona Department of Real Estate)
Hearing Date
April 26, 2019
Decision Date
May 7, 2019
Administrative Law Judge
Thomas Shedden
Petitioner’s Counsel
Lauren Vie, Esq.
Respondent’s Counsel
Joseph Velez, Esq.
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Central Allegation and Governing Covenant
The Pointe Tapatio Community Association (Petitioner) alleged that Layne C. Wilkey and Devin E. Wilkey (Respondents) violated the community’s Covenants, Conditions, and Restrictions (CC&Rs) by using their residential unit as an office for their business.
The specific provision at issue is Article 3, Section 3.1 of the CC&Rs, which states:
“Residential. Each Residence shall be used, improved, and devoted exclusively to first class residential use, and no gainful occupation, profession, trade, business, religion, or other non-residential use which creates traffic [or] parking … shall be conducted from any Residence [or part thereof.]”
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Key Findings of Fact
The Business Operation
• Respondents: Layne C. Wilkey (mother) and Devin E. Wilkey (son) are co-owners of the unit at 720 E. North Lane, Unit 1 (Lot 50).
• Company: They own and operate Devau Human Resources, a payroll processing company, from this unit. The business also operates from a second, commercial site in Tempe.
• History: The business was moved into the residential unit from a commercial location in late 2009.
• Public Presence: Devau’s website and Google Maps both list the 720 E. North Lane address as an office location, with stated office hours from 9:00 a.m. to 5:00 p.m., Monday through Friday. The website notes it is a “mailing address only.”
• Admission: Ms. Wilkey acknowledged during testimony that they consider the unit to be an office.
Employee Activity and Impact
• The Wilkeys acknowledged that two Devau employees commute to the unit to work.
• One employee works from 9:30 a.m. to 4:00 p.m., Monday through Thursday.
• A second employee works from 9:30 a.m. to 5:00 p.m., Monday through Friday.
• These employees at times park their vehicles on the community’s streets.
• The business does not have clients or customers who visit the unit.
The Dispute Over Permission
• Respondents’ Claim: The Wilkeys asserted they had permission to operate the business from Howard Flisser, a former property manager. They admitted they had no written confirmation and had never spoken to Mr. Flisser directly about it.
◦ Ms. Wilkey testified that in 2009, she asked her husband, who asked a salesperson, who then allegedly asked Mr. Flisser and relayed that it was permissible.
◦ Mr. Wilkey testified that his now-deceased father would not have taken the risk of moving the business without permission.
• Petitioner’s Rebuttal: Board member Paula Duistermars testified that Mr. Flisser stated a few days before the hearing that he could not recall giving permission and, on two occasions during the conversation, volunteered that he had never given permission.
• Authority: Ms. Duistermars also testified that Mr. Flisser lacked the authority to grant such permission; only the Board of Directors could do so.
Association’s Stance and Actions
• Notification: Through a letter dated August 8, 2018, the Association informed the Wilkeys of the violation and required compliance by August 31, 2018.
• Petition: The Association filed the petition that initiated the hearing on or about January 17, 2019.
• Other Businesses: The Association permits certain home-based businesses that do not generate traffic or parking, such as telecommuting and online teaching, without requiring Board permission.
• Complaints: Ms. Duistermars acknowledged she was unaware of any specific complaints regarding traffic, parking, or noise from the Wilkeys’ unit. However, she testified that the Board was first made aware of the business operation when another resident brought the issue to its attention.
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Legal Analysis and Conclusions
• Standard of Proof: The judge determined all issues based on a “preponderance of the evidence,” defined as evidence with the most convincing force.
• CC&Rs as Contract: The CC&Rs are a legally binding contract between the Association and the residents.
• Unambiguous Language: The judge found the language in CC&R Article 3, Section 3.1 to be clear and unambiguous. Such covenants must be enforced to give effect to the parties’ original intent.
• Direct Violation: The judge concluded that the evidence overwhelmingly showed the Wilkeys were operating a business from their unit. The admission that two employees drive to the unit and park on the street proves that the business creates both traffic and parking.
• Violation Trigger: The creation of any traffic or parking by the business is sufficient to constitute a violation. The CC&R does not require that the traffic or parking cause a secondary violation or generate resident complaints. Therefore, the lack of other complaints was deemed to have little probative value.
• Final Conclusion: Based on the facts, the Wilkeys are in clear violation of CC&R Article 3, Section 3.1.
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Final Order and Penalties
Based on the findings of fact and conclusions of law, the Administrative Law Judge issued the following orders:
1. Compliance Order: Respondent Layne C. Wilkey and Devin E. Wilkey must cease all business operations at 720 E. North Lane, Unit 1 (Lot 50) within thirty-five (35) days of the Order’s effective date.
2. Civil Penalty: The Respondents must pay a civil penalty of $500.00 to the Department of Real Estate within sixty (60) days of the Order’s effective date. Payment must be made by cashier’s check or money order.
3. Filing Fee: The Petitioner’s request for a refund of its filing fee was denied, as the judge found no legal authority to grant it.
The Order is binding unless a request for rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of service.
Study Guide:Pointe Tapatio Community Association v. Wilkey
This guide provides a comprehensive overview of the administrative law case Pointe Tapatio Community Association v. Wilkey, Case No. 19F-H1919044-REL, heard before the Arizona Office of Administrative Hearings. It details the central conflict, the arguments presented by both parties, the legal standards applied, and the final judgment.
Case Summary
The Pointe Tapatio Community Association (Petitioner) filed a complaint against homeowners Layne C. Wilkey and Devin E. Wilkey (Respondent), alleging that they were violating the community’s Covenants, Conditions, and Restrictions (CC&Rs) by operating a business, Devau Human Resources, from their residential unit. The Association argued that the business, which employed two individuals who commuted to the property, generated traffic and parking, explicitly prohibited by the CC&Rs for non-residential activities. The Wilkeys contended they had received verbal permission years prior and that the business was not disruptive. The Administrative Law Judge found in favor of the Association, ruling that the Wilkeys were in clear violation of the community’s governing documents.
Key Parties & Entities
Name / Entity
Key Actions & Involvement
Pointe Tapatio Community Association
Petitioner
The homeowners’ association that filed the petition alleging a CC&R violation. Represented by Lauren Vie, Esq.
Layne C. Wilkey & Devin E. Wilkey
Respondent
Mother and son, co-owners of the unit at 720 E. North Lane, Unit 1. Operators of Devau Human Resources. Represented by Joseph Velez, Esq.
Thomas Shedden
Administrative Law Judge (ALJ)
Presided over the hearing, made findings of fact, drew conclusions of law, and issued the final order.
Arizona Department of Real Estate
Regulatory Body
Issued the initial Notice of Hearing and has legal authority over such disputes under ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11.
Paula Duistermars
Board Member, Pointe Tapatio
Testified on behalf of the Association, detailing the Board’s position and interactions regarding the violation.
Howard Flisser
Property Manager (Former or Current)
Named by the Wilkeys as the source of verbal permission to operate their business; Flisser denied recalling this.
Devau Human Resources
Business Entity
A payroll processing company owned by the Wilkeys, operating out of the residential unit and a commercial site in Tempe.
Office of Administrative Hearings
Adjudicative Body
The venue for the hearing, located at 1740 West Adams Street, Lower Level, in Phoenix, Arizona.
Case Timeline
• Late 2009: The Wilkeys move their business, Devau Human Resources, from a commercial location into their unit at Pointe Tapatio.
• August 8, 2018: Pointe Tapatio sends a letter informing the Wilkeys they are out of compliance with the CC&Rs and must comply by August 31, 2018.
• January 17, 2019 (approx.): Pointe Tapatio files a petition with the Arizona Department of Real Estate.
• February 28, 2019: The Arizona Department of Real Estate issues a Notice of Hearing.
• April 26, 2019: The administrative hearing is held before ALJ Thomas Shedden.
• May 7, 2019: ALJ Thomas Shedden issues the final decision and order.
Central Conflict: CC&R Article 3, Section 3.1
The core of the dispute revolved around the interpretation and enforcement of a specific restrictive covenant within the community’s governing documents.
• The Allegation: Pointe Tapatio alleged that the Wilkeys were using their unit as an office for a “gainful occupation,” which is not a “first class residential use.”
• The Specific Provision: Article 3, Section 3.1 of the CC&Rs states:
• The Triggering Condition: The prohibition is not absolute. It applies specifically to non-residential uses that create traffic or parking.
Arguments and Evidence
Arguments & Evidence Presented
Petitioner (Pointe Tapatio)
- Employee Activity: The Wilkeys acknowledged two employees drive to the unit to work Monday through Friday, creating traffic and parking on community streets.
- Public Information: Devau’s website and Google Maps listed the residential unit as an office address with set business hours (9:00 a.m. to 5:00 p.m.).
- Owner Admission: Ms. Wilkey acknowledged during testimony that they consider the unit to be an office.
- Lack of Authority: Board member Paula Duistermars testified that property manager Howard Flisser did not have the authority to grant permission for a business; only the Board could. She also testified that Flisser could not recall giving permission and had volunteered that he never did.
Respondent (The Wilkeys)
- Verbal Permission: The Wilkeys claimed they received verbal permission from property manager Howard Flisser in 2009. They admitted they never spoke to him directly and had nothing in writing.
- Implied Permission: Mr. Wilkey argued his father would not have taken the risk of moving the payroll business without permission, implying it must have been granted.
- No Direct Complaints: It was acknowledged that the Association was not aware of specific complaints filed against the Wilkeys for traffic, parking, or noise issues.
- Residential Use: Mr. Wilkey testified that he considers the unit one of his two primary residences, though he did not provide a responsive answer when asked how often he stayed there.
The Judge’s Decision & Legal Reasoning
ALJ Thomas Shedden concluded that the Wilkeys were in violation of the CC&Rs based on a “preponderance of the evidence.”
• The Wilkeys operate Devau Human Resources, a payroll processing company, from the unit.
• Two employees commute to the unit for work and sometimes park on community streets.
• The business is publicly listed at the residential address.
• The Wilkeys’ claim of verbal permission from Howard Flisser was not substantiated. Testimony from Paula Duistermars indicated Flisser could not recall, and in fact denied, giving such permission.
• The Association does permit some home businesses (e.g., telecommuting, online teaching) that do not create traffic or parking and do not require Board permission.
1. CC&Rs as a Contract: The CC&Rs constitute a binding contract between the homeowners and the Association.
2. Unambiguous Language: The language in Article 3, section 3.1 is clear and unambiguous. It prohibits businesses that create traffic or parking.
3. Violation Proven: The evidence clearly showed the Wilkeys’ business created both traffic and parking due to its two commuting employees. This is a direct violation of the unambiguous terms of the CC&R.
4. No Other Violation Needed: The fact that no other rules (e.g., specific parking ordinances) were broken is irrelevant. The creation of any traffic or parking by the business is sufficient to trigger the violation as written.
1. Cease Operations: The Wilkeys were ordered to comply with CC&R Article 3, section 3.1 by ceasing business operations at the unit within 35 days.
2. Civil Penalty: The Wilkeys were ordered to pay a civil penalty of $500.00 to the Department of Real Estate within 60 days.
3. Filing Fee Request Denied: The Association’s request to have its filing fee refunded was denied because it cited no legal authority showing the judge had the power to grant it.
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Answer the following questions in 2-3 complete sentences based on the information in the case file.
1. Who were the petitioner and the respondents in this case, and what was their relationship?
2. What specific activity led the petitioner to claim the respondents were violating the CC&Rs?
3. According to Article 3, section 3.1, what condition makes a non-residential use of a property a violation?
4. What was the respondents’ primary defense for operating their business from the unit?
5. Why did the Administrative Law Judge find the respondents’ primary defense unconvincing?
6. What two specific pieces of evidence demonstrated that the business created traffic and parking?
7. What is the legal standard of proof required in this type of administrative hearing, and what does it mean?
8. What two penalties were imposed on the Wilkeys in the final order?
9. Does the Pointe Tapatio Community Association prohibit all home-based businesses? Explain.
10. Who was Howard Flisser, and what was his significance to the respondents’ case?
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Answer Key
1. The petitioner was the Pointe Tapatio Community Association. The respondents were Layne C. Wilkey and Devin E. Wilkey, who were homeowners within the community and co-owners of the unit in question.
2. The Wilkeys were operating their payroll processing company, Devau Human Resources, out of their residential unit. This included having two employees commute to the property to work during business hours.
3. A non-residential use becomes a violation if it “creates traffic [or] parking.” The rule does not require a certain amount of traffic or parking, only that it is created by the business activity.
4. The respondents’ primary defense was that they had received verbal permission to operate the business from the community’s property manager, Howard Flisser, back in 2009.
5. The judge found the defense unconvincing because the Wilkeys had no written proof, had not spoken to Mr. Flisser directly, and testimony from a board member indicated Mr. Flisser could not recall—and later denied—ever giving such permission. Furthermore, the property manager likely lacked the authority to grant it.
6. The evidence was the Wilkeys’ own acknowledgement that two of their employees drive to the unit to work on a weekly basis. This commuting by non-resident employees necessarily creates traffic and, at times, requires them to park on community streets.
7. The standard of proof is a “preponderance of the evidence.” This means the greater weight of the evidence must be sufficient to incline a fair and impartial mind to one side of the issue over the other, even if it does not remove all reasonable doubt.
8. The Wilkeys were ordered to cease all business operations at the unit within 35 days. They were also ordered to pay a civil penalty of $500.00 to the Department of Real Estate within 60 days.
9. No, the association does not prohibit all home-based businesses. It allows for activities like telecommuting and teaching online classes, which do not require board permission because they do not create traffic or parking.
10. Howard Flisser was the property manager whom the Wilkeys claimed gave them verbal permission to run their business. His significance was central to their defense, but his alleged permission was unsubstantiated and contradicted by later testimony.
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Essay Questions
The following questions are designed for longer-form analysis. No answers are provided.
1. Analyze the concept of “preponderance of the evidence” as applied in this case. How did the evidence presented by Pointe Tapatio meet this standard, while the Wilkeys’ evidence did not?
2. Discuss the legal principle that CC&Rs are treated as contracts. Explain how Judge Shedden applied contract law principles, particularly regarding “unambiguous” language, to reach his conclusion.
3. Evaluate the Wilkeys’ defense strategy, focusing on their claim of verbal permission from Howard Flisser. Why was this argument legally insufficient? What kind of evidence would have been necessary to make it successful?
4. Examine the distinction the Pointe Tapatio Community Association makes between permissible home-based businesses (like telecommuting) and impermissible ones (like Devau Human Resources). What is the key factor in this distinction according to the CC&Rs, and how does it relate to the core purpose of residential covenants?
5. Based on the judge’s order, discuss the remedies available to a homeowner’s association in Arizona when a CC&R violation is proven. What penalties were imposed, and what penalty was requested but denied?
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Glossary of Key Terms
• Administrative Law Judge (ALJ): A judge and trier of fact who presides over administrative hearings, such as disputes handled by the Office of Administrative Hearings. The ALJ renders decisions, called orders, based on evidence and legal arguments.
• CC&Rs (Covenants, Conditions, and Restrictions): The governing legal documents that set out the rules for a planned community or subdivision. In this case, they are treated as a legally binding contract between the association and the homeowners.
• Civil Penalty: A monetary fine levied by a government agency or administrative court for a violation of a statute or rule. In this case, a $500 penalty was imposed on the Wilkeys for violating the community documents.
• Conclusions of Law: The section of a judicial decision where the judge applies legal principles and statutes to the established facts of the case to reach a judgment.
• Findings of Fact: The section of a judicial decision that formally lists the factual determinations made by the judge based on the evidence presented at the hearing.
• Order: The final ruling or judgment issued by an Administrative Law Judge that directs the parties on what actions they must take.
• Petitioner: The party who initiates a legal action or files a petition seeking a legal remedy. In this case, the Pointe Tapatio Community Association.
• Preponderance of the Evidence: The standard of proof in most civil and administrative cases. It requires the trier of fact to believe that it is more likely than not that a claim is true, based on the evidence presented.
• Respondent: The party against whom a petition is filed or an appeal is brought. In this case, Layne C. Wilkey and Devin E. Wilkey.
4 Surprising Lessons from an HOA Lawsuit That Shut Down a 10-Year-Old Home Business
Introduction: The Rise of the Home Office and the Rules You Didn’t Know Existed
In an age where the line between the living room and the corner office has all but vanished, millions of us have embraced working from home. But as we settle into our home-based routines, a critical question often goes unasked: Are you truly familiar with your homeowner’s association (HOA) rules regarding home-based businesses?
For the Wilkey family, owners of Devau Human Resources, the answer to that question proved to be a costly one. After operating their payroll processing company from their home for nearly a decade without a single complaint, they found themselves in a legal battle that ultimately shut them down. Their case serves as a powerful cautionary tale about what can happen when long-standing home businesses collide with the fine print of HOA rules.
1. It’s Not About Complaints, It’s About the Contract
One of the most chilling lessons from the Wilkey case is that the HOA’s action wasn’t triggered by angry neighbors complaining about noise or traffic. In fact, Board member Paula Duistermars testified that she was unaware of any such complaints. The issue arose simply because “a resident brought the issue to [the Board’s] attention.”
This reveals a crucial legal reality: your business’s existence, not its impact, can be the sole trigger for enforcement. It doesn’t take a chorus of angry neighbors—just one person notifying the Board of a potential rule violation is enough. The Covenants, Conditions, and Restrictions (CC&Rs) are a legally binding contract, and the court’s decision was not based on whether the business was a nuisance, but simply whether it complied with the contract’s terms. Your takeaway: You must operate as if the rulebook will be enforced literally, because it can be.
2. The Deciding Factor: A Single Clause About “Traffic and Parking”
The entire legal dispute hinged on the precise wording of one specific rule. The HOA wasn’t enforcing a vague, blanket ban on all home businesses; its power came from a single, carefully worded clause in the CC&Rs.
The relevant section, Article 3, section 3.1, stated:
“Each Residence shall be used, improved, and devoted exclusively to first class residential use, and no gainful occupation, profession, trade, business, religion, or other non-residential use which creates traffic [or] parking … shall be conducted from any Residence [or part thereof.]”
As a legal analyst, I can tell you why this clause was so powerful: its focus on a tangible impact (“creates traffic [or] parking”) made it highly defensible. A blanket prohibition on “all businesses” might be open to challenge, but this specific, impact-based rule was nearly impossible to argue against once the facts were established. The Wilkeys’ business was found in violation specifically because it created traffic and parking, which is also why the HOA permitted other home businesses, like telecommuting, that did not.
3. Your Two-Person TeamIsa Traffic Problem
Many homeowners assume that business traffic rules are meant to prevent a steady stream of clients visiting a residential property. The Wilkeys had no clients come to their unit. However, this did not protect them.
The undisputed fact that proved decisive was that two of the company’s employees commuted to the home to work—one from Monday to Thursday and the other from Monday to Friday. The judge concluded that this daily employee commute constituted the creation of “traffic and parking” as prohibited by the CC&Rs. The employees at times parking on the community’s common streets provided concrete, undeniable evidence of this. This case sets a precedent that a micro-business with just one or two employees commuting to the home can be deemed in violation—a scenario many entrepreneurs wouldn’t even consider a “traffic” issue.
4. “He Said We Could” Is Not a Legal Defense
The Wilkeys asserted that they had received verbal permission to operate their business from the property manager back in 2009. This defense completely fell apart under legal scrutiny.
Courts prioritize written agreements and official board actions over “he said/she said” accounts, especially when they involve multi-level hearsay (in this case, a husband asking a salesperson who asked the manager). The defense failed for several clear reasons: the Wilkeys had no written proof, the manager denied recalling or ever giving such permission, and most importantly, a Board member testified that the manager lacked the authority to grant this permission anyway. Only the Board could.
The takeaway is unambiguous: Never rely on verbal assurances. Get all permissions from your HOA Board in writing, or they do not legally exist.
Conclusion: Know Your Rules Before You Unpack Your Desk
The story of the Wilkey family is a stark reminder that HOA documents are not mere suggestions; they are legally binding contracts where every word matters. The Wilkeys’ experience is a costly lesson for every home-based professional. Proactive compliance is your only true protection. The final outcome was an order for them to cease all business operations from their home within 35 days and pay a $500 civil penalty.
You might have been working from home for years without a problem, but have you ever read the fine print on what your community actually allows?
Case Participants
Petitioner Side
- Lauren Vie (HOA attorney)
Attorney for Petitioner
- Paula Duistermars (board member)
Pointe Tapatio Community Association
Presented testimony for Petitioner
- Beth Mulchay (HOA attorney)
Mulchay Law Firm, P.C.
Listed on transmission list
Respondent Side
- Layne C. Wilkey (respondent)
- Devin E. Wilkey (respondent)
- Joseph A Velez (respondent attorney)
For Respondent
Neutral Parties
- Thomas Shedden (ALJ)
- Judy Lowe (Commissioner)
Arizona Department of Real Estate
Other Participants
- Howard Flisser (property manager)
Statements regarding alleged business permission were discussed
- Felicia Del Sol (unknown)
