Tag Archives: 2021

Clifford (Norm) S. Burnes v. Saguaro Crest Homeowners Association,

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Case Summary

Case ID 21F-H2120002-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-08-09
Administrative Law Judge Jenna Clark
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Clifford Burnes and Maria Burnes Counsel Cynthia F. Burnes, Esq.
Respondent Saguaro Crest Homeowners Association, Inc. Counsel John Crotty, Esq.

Alleged Violations

CC&Rs Section 5
Architectural Design Guidelines Section 4.0
ARIZ. REV. STAT. § 33-1804(A), (D), and (E)
ARIZ. REV. STAT. § 33-1805

Outcome Summary

The final decision affirmed the denial of Issues 1, 2, and 3, and the granting of Issue 4. The Association was found to have violated ARIZ. REV. STAT. § 33-1805 for failing to provide complete records in a timely manner, resulting in the reimbursement of 1/4 of the filing fee.

Why this result: Petitioners failed to sustain the burden of proof regarding alleged violations of CC&Rs Section 5, Architectural Design Guidelines Section 4.0, and A.R.S. § 33-1804(A), (D), and (E).

Key Issues & Findings

Alleged violation of CC&Rs Section 5

Petitioners alleged that the HOA violated the Covenants, Conditions and Restrictions (CC&Rs), Section 5, by allowing construction on Lot 7 without prior ARC approval of required documents.

Orders: Petition denied.

Filing fee: $125.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • CC&Rs Section 5

Alleged violation of Community Agricultural Design Guidelines Section 4.0

Petitioners alleged that the HOA violated the Architectural Design Guidelines, Section 4.0, by failing to require the required $5,000.00 Construction Compliance Deposit for Lot 7.

Orders: Petition denied.

Filing fee: $125.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • Architectural Design Guidelines Section 4.0
  • ARIZ. REV. STAT. § 10-3821

Alleged violation of A.R.S. § 33-1804(A), (D), and (E)

Petitioners alleged that the Board conducted an unnoticed closed meeting in violation of Arizona open meeting statutes.

Orders: Petition denied.

Filing fee: $125.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 33-1804(A)
  • ARIZ. REV. STAT. § 33-1804(D)
  • ARIZ. REV. STAT. § 33-1804(E)
  • ARIZ. REV. STAT § 10-3821

Alleged violation of A.R.S. § 33-1805

Petitioners alleged that the HOA failed to timely and completely fulfill a records request submitted on June 04, 2020, specifically by failing to provide missing email attachments.

Orders: Respondent must reimburse 1/4 of Petitioners' filing fee ($125.00). Respondent must henceforth comply with A.R.S. § 33-1805 and provide the missing email attachments within 10-business days.

Filing fee: $125.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. § 33-1805

Analytics Highlights

Topics: HOA Statute Violation, Records Request, Filing Fee Refund, Architectural Review, Open Meetings
Additional Citations:

  • ARIZ. REV. STAT. § 32-2102
  • ARIZ. REV. STAT. § 32-2199
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 32-2199.05
  • ARIZ. REV. STAT. § 33-1804(A)
  • ARIZ. REV. STAT. § 33-1804(D)
  • ARIZ. REV. STAT. § 33-1804(E)
  • ARIZ. REV. STAT. § 33-1805
  • ARIZ. REV. STAT. § 10-3821
  • CC&Rs Section 5
  • Architectural Design Guidelines Section 4.0

Video Overview

Audio Overview

Decision Documents

21F-H2120002-REL Decision – 902726.pdf

Uploaded 2026-04-24T11:28:59 (239.9 KB)

21F-H2120002-REL Decision – 866263.pdf

Uploaded 2026-04-24T11:29:03 (268.5 KB)

Briefing Document: Burnes v. Saguaro Crest Homeowners Association, Final Decision

Executive Summary

This document synthesizes the Final Administrative Law Judge Decision in the case of Clifford and Maria Burnes (“Petitioners”) versus the Saguaro Crest Homeowners Association (“Respondent”), case number 21F-H2120002-REL-RHG. The dispute centered on a four-issue petition alleging violations by the Association related to new construction on a neighboring property (Lot 7), an unnoticed Board meeting, and the fulfillment of a records request.

Following an initial hearing and a subsequent rehearing, the Administrative Law Judge (ALJ) largely affirmed the original decision. The Petitioners failed to meet their burden of proof on three of the four issues, with the judge finding no violations by the Association regarding architectural controls, the waiver of a construction deposit, or the conduct of a Board meeting.

However, the Petitioners successfully proved that the Association violated Arizona Revised Statute § 33-1805 by failing to timely and completely fulfill a comprehensive records request. The final order requires the Association to reimburse the Petitioners for a portion of their filing fee ($500), comply with the records statute moving forward, and provide the specific missing documents (email attachments) from the original request. The rehearing was granted on the basis of “newly discovered evidence,” but the Petitioners conceded during the proceeding that they possessed no new evidence, leading the ALJ to rely solely on the record from the first hearing.

I. Background and Procedural History

The case involves a dispute between property owners Clifford and Maria Burnes and their homeowners’ association, Saguaro Crest, located in Tucson, Arizona. The Association is governed by Covenants, Conditions, and Restrictions (CC&Rs) recorded in 2006 and Architectural Design Guidelines adopted in 2018.

Procedural Timeline

July 17, 2020

Petitioners file a 4-issue petition with the Arizona Department of Real Estate.

August 11, 2020

Respondent (HOA) denies all claims in its answer.

Dec 11, 2020 & Mar 1-2, 2021

An evidentiary hearing is held before the Office of Administrative Hearings (OAH).

March 22, 2021

The Administrative Law Judge (ALJ) issues the initial decision.

April 28, 2021

Petitioners file a dispute rehearing request, alleging newly discovered evidence.

May 21, 2021

The Commissioner of the Department of Real Estate grants the rehearing request.

July 20, 2021

The rehearing is held. Petitioners concede they have no “new” evidence.

August 09, 2021

The Final Administrative Law Judge Decision is issued, affirming the initial ruling.

Key Parties

Name / Entity

Clifford & Maria Burnes

Petitioners; owners of Lot 6.

Cynthia F. Burnes, Esq.

Counsel for Petitioners.

Saguaro Crest HOA, Inc.

Respondent.

John Crotty, Esq.

Counsel for Respondent.

Norm Burnes

Petitioner; appointed to the Architectural Review Committee (ARC) in 2017.

Raul & Ramona Martinez

Owners of Lot 7, the property under construction.

Jenna Clark

Administrative Law Judge (ALJ).

II. Analysis of Allegations and Findings

The petition presented four distinct issues for adjudication. The Petitioners bore the burden of proving each violation by a preponderance of the evidence.

Issue 1: Alleged Violation of CC&Rs Section 5 (Architectural Control)

• Petitioners’ Allegation: The Association improperly allowed construction on Lot 7 to proceed without required documents being submitted to the Architectural Review Committee (ARC) for approval.

• Factual Record:

◦ The ARC, which included Petitioner Norm Burnes, unanimously approved construction plans for Lot 7 on January 3, 2018.

◦ Construction began sometime in 2018. Pima County approved the plans on May 4, 2018.

◦ On April 14, 2020, Petitioner Burnes sent a formal letter of concern to the Board, stating the placement of the home on Lot 7 was not per the approved plan and had destroyed their view and privacy. The letter included the following statement:

• Conclusion of Law: No violation found. The ALJ determined that while the construction on Lot 7 was not per the plans the ARC approved on January 3, 2018, no subsequent or modified plans were ever submitted to the ARC for review. The decision states, “The ARC cannot approve or deny proposed plans unless they are submitted for review.” Furthermore, the record shows the construction complies with the local government’s building authority.

Issue 2: Alleged Violation of Design Guidelines Section 4.0 (Construction Deposit)

• Petitioners’ Allegation: The Association allowed construction on Lot 7 without collecting the required $5,000.00 Construction Compliance Deposit.

• Factual Record:

◦ On May 3, 2020, the Board of Directors decided to honor a Construction Compliance Deposit waiver that had been previously granted to the Martinez family.

◦ This discretionary waiver was reportedly granted during an economic downturn to incentivize property purchases.

◦ Critically, the Association “does not possess a corporate record that any such Construction Compliance Deposit Waiver was previously granted to the Martinez family.”

• Conclusion of Law: No violation found. The ALJ concluded it was “clear that Lot 7 was granted a construction compliance deposit waiver.” The lack of a documented record was noted, but the inquiry was deemed moot as it was not a noticed issue in the petition.

Issue 3: Alleged Violation of A.R.S. § 33-1804 (Unnoticed Meeting)

• Petitioners’ Allegation: The Board of Directors conducted an unnoticed meeting on or about May 20, 2020, to consider matters relevant to Petitioner Norm Burnes.

• Factual Record:

◦ On April 18, 2020, Petitioner requested an urgent meeting with the Board, which was held the next day.

◦ On May 20, 2020, the Board acted with unanimous consent (obtained via individual signatures) to restrict Petitioner Burnes’s participation as an ARC member “regarding all issued related to the construction of Lot 7.”

◦ The Board’s notes state: “[T]he Board of Directors hereby unanimously agree that [Petitioner] be removed as an ARC Member for all ARC related matters concerning Lot 7.”

• Conclusion of Law: No violation found. The judge ruled that the Board’s failure to notice the April 19 meeting was excused as an exception because the Petitioner himself had requested it on an urgent basis. Regarding the May 20 action, the record shows Mr. Burnes was not removed from the ARC entirely, but only recused from matters concerning the Lot 7 dispute in which he had a direct conflict of interest.

Issue 4: Alleged Violation of A.R.S. § 33-1805 (Records Request)

• Petitioners’ Allegation: The Association failed to properly fulfill a records request.

• Factual Record:

◦ On June 4, 2020, Petitioners submitted a comprehensive, 17-point records request and demanded fulfillment within the statutory 10-day period.

◦ On June 16, 2020, the Association made 342 pages of documents available for in-person review but prohibited Petitioners from using their own scanning equipment.

◦ The statutory deadline for compliance was June 18, 2020.

◦ On June 24, 2020, after Petitioners paid a $51.30 fee, the Association provided copies of the documents.

◦ Later that day, Petitioners notified the Association that the document package was incomplete, as “attachments for some emails are not included.”

• Conclusion of Law: Violation established. The ALJ found that the Association failed to comply with the statute. The documents were made available for review within the 10-day window, but the copies were not provided until June 24, after the deadline. More importantly, the copies provided were incomplete. The judge rejected the Association’s argument that a clarification from the Petitioner reset the statutory clock.

III. Final Order and Directives

The Final Administrative Law Judge Decision, issued after the rehearing, affirmed the conclusions of the initial March 22, 2021 decision.

• Petition Status: The petition was granted in part (on Issue 4) and denied in part (on Issues 1, 2, and 3).

• Financial Reimbursement: The Respondent (Saguaro Crest HOA) is ordered to reimburse the Petitioners for one-quarter of their filing fee, amounting to $500.00.

• Statutory Compliance: The Respondent is ordered to henceforth comply with the requirements of A.R.S. § 33-1805 regarding records requests.

• Document Production: The Respondent is ordered to provide the Petitioners with the missing email attachments related to the June 4, 2020 records request within 10 business days of the final order’s effective date.

Study Guide: Burnes v. Saguaro Crest Homeowners Association, Inc.

This study guide provides a detailed review of the Final Administrative Law Judge Decision in the case of Clifford and Maria Burnes versus the Saguaro Crest Homeowners Association, Inc. (No. 21F-H2120002-REL-RHG). The guide includes a short-answer quiz with an answer key, a set of essay questions for deeper analysis, and a comprehensive glossary of key terms used in the legal proceedings.

Short-Answer Quiz

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

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

2. List the four distinct issues the Petitioners alleged against the Respondent in their initial petition.

3. On what grounds did the Petitioners request and receive a rehearing after the initial decision was issued on March 22, 2021?

4. What was the outcome of the Petitioners’ attempt to present new witnesses and exhibits during the rehearing on July 20, 2021?

5. Why did the Administrative Law Judge conclude that the Respondent had not violated Section 5 of the CC&Rs regarding the construction on Lot 7?

6. Explain the controversy surrounding the $5,000 Construction Compliance Deposit and the court’s ultimate finding on the matter.

7. What action did the Board of Directors take against Petitioner Norm Burnes on May 20, 2020, and why was this action not considered a violation of A.R.S. § 33-1804?

8. Which of the four allegations was ultimately successful for the Petitioners, and what specific failures by the Respondent led to this finding?

9. What were the four key orders issued by the Administrative Law Judge in the Final Order?

10. What was Petitioner Norm Burnes’s official role within the Saguaro Crest community, and how did this position create a conflict of interest in the dispute?

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Quiz Answer Key

1. The Petitioners are Clifford and Maria Burnes, who are property owners in the Saguaro Crest subdivision and members of the homeowners’ association. The Respondent is the Saguaro Crest Homeowners Association, Inc. (HOA), which is the governing body for the subdivision.

2. The four issues were: (1) The HOA allowed construction on Lot 7 without required ARC document submission in violation of CC&Rs Section 5; (2) The HOA allowed construction without a required Construction Compliance Deposit; (3) The Board conducted an unnoticed meeting in violation of A.R.S. § 33-1804; (4) The HOA failed to fulfill a records request in violation of A.R.S. § 33-1805.

3. The Petitioners requested a rehearing on the grounds of having “Newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.” They also alleged that the original decision was “arbitrary, capricious, or an abuse of discretion.”

4. At the rehearing, the Petitioners conceded they possessed no “newly discovered” evidence, but rather evidence they had strategically chosen not to present previously. Because they did not provide a satisfactory offer of proof for new evidence, they were precluded from recalling witnesses or offering additional exhibits.

5. The Judge found that while the construction on Lot 7 was not per the plans approved by the ARC on January 3, 2018, no additional plans had been submitted for the ARC’s consideration. The Judge reasoned that the ARC cannot approve or deny plans that are not submitted, and the build complied with the local government’s building authority.

6. The Architectural Design Guidelines required a $5,000 deposit, but the owners of Lot 7 had been granted a waiver. Although the HOA did not possess a corporate record of the waiver, the Board voted to honor it. The court found no violation because the waiver had been granted, and the lack of documentation was not the specific issue being litigated.

7. On May 20, 2020, the Board held an unnoticed meeting and, via unanimous consent, restricted Petitioner Burnes’s participation as an ARC member for all matters related to Lot 7. This was not a violation because the failure to notice was excused as an exception, and the Board only removed him from matters concerning Lot 7, not from the ARC entirely.

8. Issue #4, the records request violation, was successful for the Petitioners. The Respondent failed to provide copies of the requested documents within the statutory 10-day deadline, providing them on June 24, 2020, when the deadline was June 18, 2020. Furthermore, the documents provided were incomplete, as they were missing email attachments.

9. The Final Order affirmed the previous decision, ordered the Respondent to reimburse the Petitioners for 1/4 of their filing fee ($500.00), ordered the Respondent to comply with A.R.S. § 33-1805 going forward, and ordered the Respondent to provide the missing email attachments within 10 business days.

10. Petitioner Norm Burnes was a member of the Association’s Architectural Review Committee (ARC). This created a conflict of interest because he was part of the committee that initially approved the Lot 7 construction plans, but he later raised formal complaints against that same construction project due to its impact on his own property (Lot 6).

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Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. No answers are provided.

1. Analyze the concept of “burden of proof” by a “preponderance of the evidence” as it applies to this case. How did the Petitioners succeed in meeting this burden for Issue #4 but fail for the other three issues?

2. Discuss the powers and limitations of a Homeowners’ Association Board and its Architectural Review Committee as illustrated in this case, specifically concerning construction approval, enforcement authority, and the management of member conflicts of interest.

3. The Petitioners’ request for a rehearing was based on “newly discovered material evidence.” Explain why this request ultimately failed to change the outcome and discuss the strategic decisions made by the Petitioners regarding the presentation of evidence.

4. Examine the conflict between a homeowner’s desire for privacy and unobstructed views (as expressed by the Petitioners) and the rights of a neighboring property owner to develop their land. How did the community’s governing documents and the final legal decision address this conflict?

5. Trace the timeline of the records request dispute (Issue #4). What were the specific actions and inactions by the Respondent that led to a finding of a statutory violation, and what does this illustrate about an HOA’s administrative and statutory responsibilities to its members?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions. In this case, the ALJ was Jenna Clark.

Architectural Review Committee (ARC)

A committee charged by an HOA’s CC&Rs with implementing architectural guidelines to maintain aesthetic standards and preserve property values. Petitioner Norm Burnes was a member of this committee.

Arizona Department of Real Estate (Department)

The state agency authorized to receive and decide petitions for hearings from members of homeowners’ associations in Arizona.

Arizona Revised Statute (ARIZ. REV. STAT. or A.R.S.)

The codified laws of the State of Arizona. Specific statutes cited include § 33-1804 (regarding open meetings) and § 33-1805 (regarding association records).

Burden of Proof

The obligation on a party in a legal case to prove their allegations. In this proceeding, the Petitioners bore the burden of proving their claims by a preponderance of the evidence.

Covenants, Conditions, and Restrictions (CC&Rs)

The governing legal documents that set up the rules for a planned community. They form an enforceable contract between the HOA and each property owner.

Homeowners’ Association (HOA)

The organization that makes and enforces rules for a subdivision or planned community. In this case, the Saguaro Crest Homeowners Association, Inc. is the Respondent.

Offer of Proof

A presentation of evidence made to a judge to demonstrate the substance and relevance of evidence that a party seeks to introduce. The Petitioners’ offer of proof regarding new evidence was found to be unsatisfactory.

Office of Administrative Hearings (OAH)

An independent state agency that conducts evidentiary hearings for other state agencies. This matter was referred to the OAH by the Department of Real Estate.

Petitioners

The party that initiates a legal action or petition. In this case, Clifford and Maria Burnes are the Petitioners.

Preponderance of the Evidence

The standard of proof in most civil cases. It means that the evidence presented is sufficient to convince the trier of fact that a contention is more probably true than not.

Respondent

The party against whom a petition is filed. In this case, the Saguaro Crest Homeowners Association, Inc. is the Respondent.

🧑‍⚖️

21F-H2120002-REL-RHG

1 source

The provided text is a Final Administrative Law Judge Decision from the Office of Administrative Hearings in Arizona, detailing a dispute between petitioners Clifford and Maria Burnes and the Saguaro Crest Homeowners Association, Inc. The case involved four specific allegations of violations by the Association, including allowing unapproved construction on Lot 7, failing to collect a required construction deposit, conducting an unnoticed meeting, and failing to fulfill a records request. This document affirms an earlier decision, concluding that the Petitioners failed to sustain the burden of proof for the first three issues but succeeded on the fourth issue regarding the violation of Arizona law concerning records requests. Consequently, the Association was ordered to comply with the relevant statute, provide missing email attachments, and reimburse a portion of the Petitioners’ filing fee.

Case Participants

Petitioner Side

  • Clifford (Norm) S. Burnes (petitioner)
    Saguaro Crest subdivision property owner; ARC Member
  • Maria Burnes (petitioner)
    Saguaro Crest subdivision property owner
  • Jacob A. Kubert (attorney)
  • Cynthia F. Burnes (attorney)
  • Debora Brown (witness)

Respondent Side

  • John Crotty (attorney)
    Law Offices of Farley, Choate & Wood
  • Kelsea Dressen (attorney)
    Law Offices of Farley, Choate & Wood
  • Esmerelda Martinez (board president; witness)
    Saguaro Crest HOA Board of Directors
    President of the Board
  • Dave Madill (board member)
    Saguaro Crest HOA Board of Directors
    Vice President of the Board
  • Julie Stevens (board member)
    Saguaro Crest HOA Board of Directors
    Treasurer of the Board
  • Raul Martinez (property owner)
    Owner of Lot 7 and 13
    Construction on his property (Lot 7) is subject of the dispute
  • Ramona Martinez (property owner)
    Owner of Lot 7

Neutral Parties

  • Jenna Clark (ALJ)
    Office of Administrative Hearings
  • Sadot Negreté (observer)
  • Judy Lowe (ADRE Commissioner)
    Arizona Department of Real Estate
  • Dan Gardener (ADRE contact)
    Arizona Department of Real Estate
    Also listed as DGardner
  • c. serrano (administrative staff)
    Office of Administrative Hearings

Other Participants

  • Jamie Argueta (ARC member; property seller)
    Saguaro Crest HOA Architectural Review Committee
    Sold Lots 7 and 13 to Martinez family
  • Joseph Martinez (ARC member)
    Saguaro Crest HOA Architectural Review Committee
  • Jesus Carranza (substitute ARC member)
    Saguaro Crest HOA Architectural Review Committee
    Substitute for Petitioner during Lot 7 discussion

Carlos J Sanchez & Marinda K Minch, vs. Tempe Villages Homeowners

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Case Summary

Case ID 21F-H2121033-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-03-09
Administrative Law Judge Sondra J. Vanella
Outcome The Petition was dismissed because Petitioners failed to prove the Respondent HOA violated the Bylaws regarding the filling of a vacant Board seat. The ALJ determined the Bylaws did not impose a timeframe for filling the vacancy and the Board acted according to Article IV, Section 3.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Carlos J. Sanchez & Marinda K. Minch Counsel —
Respondent Tempe Villages Homeowners Association, Inc. Counsel Ashley Moscarello

Alleged Violations

Bylaws Article 4 Section 1

Outcome Summary

The Petition was dismissed because Petitioners failed to prove the Respondent HOA violated the Bylaws regarding the filling of a vacant Board seat. The ALJ determined the Bylaws did not impose a timeframe for filling the vacancy and the Board acted according to Article IV, Section 3.

Why this result: Petitioners failed to meet the burden of proof to establish the violation by a preponderance of the evidence. The Bylaws do not contain a provision providing a timeframe in which a vacancy on the Board must be filled.

Key Issues & Findings

Violation of Bylaws regarding Board of Directors composition and appointment

Petitioners alleged the HOA violated Bylaws Article 4 Section 1 by leaving a Board seat open following a resignation (August 2020) and not filling it until November 2020. The ALJ found the Bylaws (Sections 1, 2, and 3) did not mandate a timeframe for filling a vacancy, and the HOA followed procedures for appointment.

Orders: Petitioners’ Petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 32-2199
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
  • A.A.C. R2-19-119(B)(2)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Analytics Highlights

Topics: HOA Governance, Board of Directors, Bylaws, Board Vacancy
Additional Citations:

  • A.R.S. § 32-2199
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
  • A.A.C. R2-19-119(B)(2)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
  • 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

21F-H2121033-REL Decision – 862059.pdf

Uploaded 2026-04-24T11:33:33 (132.3 KB)

21F-H2121033-REL Decision – 862059.pdf

Uploaded 2026-01-23T17:36:41 (132.3 KB)

This summary addresses the legal case hearing concerning the dispute between Carlos J. Sanchez & Marinda K. Minch (Petitioners) and Tempe Villages Homeowners Association, Inc. (Respondent). The hearing was held before an Administrative Law Judge (ALJ) on March 2, 2021.

Key Facts and Main Issues

Petitioners filed a Homeowners Association (HOA) Dispute Process Petition on or about January 11, 2021, alleging the Respondent violated community Bylaws, specifically Article 4 Section 1.

The central issue was whether the HOA improperly maintained an unfilled seat on its Board of Directors. Petitioners asserted that the HOA violated the Bylaws by leaving a Board seat vacant for a period of time and attempted to prevent Petitioner Marinda Minch from joining the Board.

Respondent's defense focused on the interpretation of Article IV of the Bylaws. The Board's number is set at seven directors. A director resigned in August 2020, leaving six members. The subsequent annual meeting in October 2020 filled two regularly expiring seats via election, in which Petitioners were candidates but were not elected.

The August 2020 vacancy was subject to Article IV, Section 3 of the Bylaws, which states that in the event of resignation, the successor "shall be selected by the remaining members of the Board" to serve the unexpired term.

Hearing Proceedings and Arguments

Petitioners' Argument: Petitioner Marinda Minch testified that the Board delayed filling the vacancy (until November 2020) because of personal dislike for her, and she had petitioned the Board three times for appointment.

Respondent's Argument: Respondent’s President, Bradley Hudson, testified that the Board decided the newly elected Board should fill the vacancy. At the November 11, 2020, virtual meeting, a motion to appoint Ms. Minch failed (2-4 vote), and the Board subsequently appointed another individual (4-2 vote), thereby filling all seven seats. Crucially, the Respondent argued, and the ALJ noted, that the Bylaws do not contain a timeframe within which a vacancy due to resignation must be filled.

Legal Points and Outcome

Petitioners bore the burden of proof to establish the alleged violation by a preponderance of the evidence.

The ALJ determined that Article IV Sections 1, 2, and 3 must be read collectively. The process used by the Board to fill the August vacancy—selection by the remaining Board members—complied with Article IV, Section 3. Because the Bylaws did not mandate an immediate appointment timeframe, the Respondent was found to have acted within the scope of the community documents.

Final Decision: The Petitioners failed to sustain their burden to establish a violation of the Bylaws. IT IS ORDERED that Petitioners’ Petition is dismissed.

Questions

Question

If a Board member resigns, does the HOA have to hold an election to fill the seat?

Short Answer

Not necessarily. Bylaws may allow the remaining Board members to appoint a successor for the unexpired term.

Detailed Answer

In this case, the Bylaws explicitly stated that in the event of a resignation, the remaining Board members select the successor. The ALJ found that the Board was not required to put this seat up for a general election, distinguishing it from seats with expiring terms.

Alj Quote

In the event of death, resignation or removal of a director, his successor shall be selected by the remaining members of the Board and shall serve for the unexpired term of his predecessor.

Legal Basis

Bylaws Article IV, Section 3

Topic Tags

  • Board Vacancies
  • Elections
  • Bylaws

Question

Is there a specific deadline for the Board to fill a vacant seat after a resignation?

Short Answer

Only if the governing documents specify one. If the Bylaws are silent, there is no strict timeframe.

Detailed Answer

The ALJ ruled that because the community's Bylaws did not specify a deadline, the HOA did not violate the rules by waiting several months (from August to November) to fill the vacancy.

Alj Quote

The Bylaws do not contain a timeframe in which the Board must appoint a successor director after the resignation of a director.

Legal Basis

Bylaws Interpretation

Topic Tags

  • Board Vacancies
  • Timelines
  • Bylaws

Question

Can the Community Manager appoint or remove Board members?

Short Answer

No. The authority to appoint or remove directors typically lies with the Board or the membership, not the manager.

Detailed Answer

The Community Manager testified that they lacked the authority to make such appointments, confirming that this power resides with the Board itself.

Alj Quote

Mr. Nurse further testified that he does not have the authority to appoint or remove members of the Board.

Legal Basis

Testimony / Findings of Fact

Topic Tags

  • Community Manager
  • Authority
  • Board Composition

Question

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

Short Answer

The homeowner (Petitioner) must prove the violation by a 'preponderance of the evidence'.

Detailed Answer

This legal standard requires the homeowner to show that their claims are 'more probably true than not.' It is not enough to simply make an allegation; superior evidentiary weight is required.

Alj Quote

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

Legal Basis

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

Topic Tags

  • Legal Standards
  • Burden of Proof
  • Evidence

Question

Can I force the Board to hold a vote for a vacant seat if the term hasn't expired yet?

Short Answer

Generally, no. If the term is unexpired, it may not be eligible for a member vote if the Bylaws provide for appointment.

Detailed Answer

The ALJ accepted the explanation that a seat vacated by resignation was not eligible for the general member vote because the original term had not yet expired (it ran until 2022), whereas other seats were up for election because their terms had ended.

Alj Quote

Mr. Nurse explained that the term for the Board member who resigned does not expire until 2022, and as such was not eligible for a member vote.

Legal Basis

Findings of Fact / Bylaws

Topic Tags

  • Elections
  • Board Terms
  • Voting

Question

Does personal dislike or bias by the Board constitute a violation of the Bylaws?

Short Answer

Not on its own. The homeowner must prove a specific violation of the governing documents.

Detailed Answer

Although the homeowner claimed the Board disliked her and was trying to keep her out, the ALJ dismissed the petition because the HOA followed the technical requirements of the Bylaws regarding elections and appointments.

Alj Quote

Petitioners failed to prove by a preponderance of the evidence that Respondent violated the Bylaws as alleged in the Petition.

Legal Basis

Conclusions of Law

Topic Tags

  • Discrimination/Bias
  • Enforcement
  • Board Conduct

Case

Docket No
21F-H2121033-REL
Case Title
Carlos J. Sanchez & Marinda K. Minch v. Tempe Villages Homeowners Association, Inc.
Decision Date
2021-03-09
Alj Name
Sondra J. Vanella
Tribunal
OAH
Agency
ADRE

Questions

Question

If a Board member resigns, does the HOA have to hold an election to fill the seat?

Short Answer

Not necessarily. Bylaws may allow the remaining Board members to appoint a successor for the unexpired term.

Detailed Answer

In this case, the Bylaws explicitly stated that in the event of a resignation, the remaining Board members select the successor. The ALJ found that the Board was not required to put this seat up for a general election, distinguishing it from seats with expiring terms.

Alj Quote

In the event of death, resignation or removal of a director, his successor shall be selected by the remaining members of the Board and shall serve for the unexpired term of his predecessor.

Legal Basis

Bylaws Article IV, Section 3

Topic Tags

  • Board Vacancies
  • Elections
  • Bylaws

Question

Is there a specific deadline for the Board to fill a vacant seat after a resignation?

Short Answer

Only if the governing documents specify one. If the Bylaws are silent, there is no strict timeframe.

Detailed Answer

The ALJ ruled that because the community's Bylaws did not specify a deadline, the HOA did not violate the rules by waiting several months (from August to November) to fill the vacancy.

Alj Quote

The Bylaws do not contain a timeframe in which the Board must appoint a successor director after the resignation of a director.

Legal Basis

Bylaws Interpretation

Topic Tags

  • Board Vacancies
  • Timelines
  • Bylaws

Question

Can the Community Manager appoint or remove Board members?

Short Answer

No. The authority to appoint or remove directors typically lies with the Board or the membership, not the manager.

Detailed Answer

The Community Manager testified that they lacked the authority to make such appointments, confirming that this power resides with the Board itself.

Alj Quote

Mr. Nurse further testified that he does not have the authority to appoint or remove members of the Board.

Legal Basis

Testimony / Findings of Fact

Topic Tags

  • Community Manager
  • Authority
  • Board Composition

Question

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

Short Answer

The homeowner (Petitioner) must prove the violation by a 'preponderance of the evidence'.

Detailed Answer

This legal standard requires the homeowner to show that their claims are 'more probably true than not.' It is not enough to simply make an allegation; superior evidentiary weight is required.

Alj Quote

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

Legal Basis

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

Topic Tags

  • Legal Standards
  • Burden of Proof
  • Evidence

Question

Can I force the Board to hold a vote for a vacant seat if the term hasn't expired yet?

Short Answer

Generally, no. If the term is unexpired, it may not be eligible for a member vote if the Bylaws provide for appointment.

Detailed Answer

The ALJ accepted the explanation that a seat vacated by resignation was not eligible for the general member vote because the original term had not yet expired (it ran until 2022), whereas other seats were up for election because their terms had ended.

Alj Quote

Mr. Nurse explained that the term for the Board member who resigned does not expire until 2022, and as such was not eligible for a member vote.

Legal Basis

Findings of Fact / Bylaws

Topic Tags

  • Elections
  • Board Terms
  • Voting

Question

Does personal dislike or bias by the Board constitute a violation of the Bylaws?

Short Answer

Not on its own. The homeowner must prove a specific violation of the governing documents.

Detailed Answer

Although the homeowner claimed the Board disliked her and was trying to keep her out, the ALJ dismissed the petition because the HOA followed the technical requirements of the Bylaws regarding elections and appointments.

Alj Quote

Petitioners failed to prove by a preponderance of the evidence that Respondent violated the Bylaws as alleged in the Petition.

Legal Basis

Conclusions of Law

Topic Tags

  • Discrimination/Bias
  • Enforcement
  • Board Conduct

Case

Docket No
21F-H2121033-REL
Case Title
Carlos J. Sanchez & Marinda K. Minch v. Tempe Villages Homeowners Association, Inc.
Decision Date
2021-03-09
Alj Name
Sondra J. Vanella
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Carlos J. Sanchez (petitioner)
    Candidate for Board election
  • Marinda K. Minch (petitioner)
    Candidate for Board election; considered for vacancy appointment; testified

Respondent Side

  • Ashley Moscarello (HOA attorney)
    Goodman Lawgroup
  • Bradley Hudson (board member)
    Tempe Villages Homeowners Association, Inc. Board
    President of the Board; testified as witness
  • Shawn Nurse (community manager)
    Tempe Villages Homeowners Association, Inc.
    Testified as witness; received ballots for election
  • William Skanadore (board member)
    Tempe Villages Homeowners Association, Inc. Board
    Incumbent candidate; elected
  • Will Terrick (board member)
    Tempe Villages Homeowners Association, Inc. Board
    Incumbent candidate; elected
  • Wendelyn Neal (board member)
    Tempe Villages Homeowners Association, Inc. Board
    Made motion to appoint Marinda Minch
  • Joel Krick (board member)
    Tempe Villages Homeowners Association, Inc. Board
  • Kathy Hudson (board member)
    Tempe Villages Homeowners Association, Inc. Board
  • Christiane Pieraggi (board member)
    Tempe Villages Homeowners Association, Inc. Board
    Appointed to fill vacancy

Neutral Parties

  • Sondra J. Vanella (ALJ)
    OAH
  • Judy Lowe (commissioner)
    ADRE

Other Participants

  • John Neelsen (unknown)
    Candidate for Board election
  • Tania Almonte (board member)
    Tempe Villages Homeowners Association, Inc. Board
    Former Board member whose resignation created a vacancy
  • Ruby (witness assistant)
    Aided in counting votes

Lee & Kim Edwards v. Scottsdale Embassy Condominium Association

Posted on by

Case Summary

Case ID 21F-H2120028-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-07-28
Administrative Law Judge Velva Moses-Thompson
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Lee & Kim Edwards Counsel Terry Foster, Esq.
Respondent Scottsdale Embassy Condominium Association Counsel —

Alleged Violations

A.R.S. § 33-1255

Outcome Summary

The Administrative Law Judge dismissed the petition, finding that the Petitioner failed to prove by a preponderance of the evidence that the Respondent violated its CC&Rs, Bylaws, or A.R.S. § 33-1255, ruling that the statute was inapplicable due to the specific provisions in the Declaration regarding the 1/26 assessment calculation.

Why this result: Petitioner failed to meet the burden of proof, and the ALJ determined A.R.S. § 33-1255 was superseded by the Declaration, which mandated assessments based on the undivided 1/26 interest in the common elements.

Key Issues & Findings

Assessment calculation based on undivided interest in common areas

Petitioner challenged the Association's decision to change assessments from a historical square footage basis to a 1/26 interest calculation, arguing that this method violates A.R.S. § 33-1255 by charging for limited common elements (patios/parking).

Orders: The petition of Lee & Kim Edwards is dismissed; Respondent is deemed the prevailing party.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1255
  • Declaration Article I, Section 5
  • Declaration Article II, Section 5
  • Declaration Article II, Section 7
  • Declaration Article IV, Section 4
  • Declaration Article VI, Section 9

Analytics Highlights

Topics: condominium, assessment, cc&r, statutory interpretation, common elements, limited common elements
Additional Citations:

  • A.R.S. § 32-2199(1)
  • A.R.S. § 33-1255
  • 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
  • Powell v. Washburn, 211 Ariz. 553
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70

Video Overview

Audio Overview

Decision Documents

21F-H2120028-REL Decision – 899379.pdf

Uploaded 2026-04-24T11:32:11 (123.6 KB)

21F-H2120028-REL Decision – 856603.pdf

Uploaded 2026-04-24T11:32:19 (98.1 KB)

Assessment Methodology Dispute: Edwards v. Scottsdale Embassy Condominium Association

Executive Summary

This document provides a comprehensive analysis of the legal dispute between homeowners Lee & Kim Edwards (Petitioners) and the Scottsdale Embassy Condominium Association (Respondent) concerning a change in the methodology for calculating homeowner assessments. The core of the conflict was the Association’s decision to shift from a historical practice of assessments based on unit square footage to a uniform rate where each of the 26 units pays an equal 1/26 share of the common expenses.

The dispute was adjudicated by an Administrative Law Judge (ALJ) in two separate hearings. In both instances, the ALJ ruled in favor of the Association, dismissing the petitions filed by the Edwards.

Key Takeaways:

• Change in Methodology: The Association’s Board, acting on legal advice received in January 2020, concluded that its 40-year practice of using a square-footage-based assessment violated the community’s Covenants, Conditions, and Restrictions (CC&Rs). The Board subsequently implemented a 1/26 equal-share assessment method after a majority of homeowners selected this option.

• Initial Ruling on “Uniform Rate”: In the first hearing in February 2021, the Petitioners argued that the historical square footage method was a “uniform rate” and that the Association had waived its right to change the long-standing practice. The ALJ rejected this, finding that the new 1/26 rate complied with the CC&Rs’ requirement for a “uniform rate” (Article VI, Section 9) and aligned with each unit’s specified 1/26 undivided interest in the common elements (Article VI, Section 4(d)).

• Rehearing Ruling on State Statute: The Petitioners were granted a rehearing in July 2021, where they argued that the 1/26 method violated Arizona statute A.R.S. § 33-1255 by improperly charging all owners for “limited common elements” like patios and parking spaces. The ALJ again ruled against the Petitioners, concluding that the state statute did not apply. The ruling was based on a key provision in the statute: “Unless otherwise provided for in the declaration.” The judge found that the Association’s Declaration did provide otherwise by defining patios and parking as general common elements and explicitly mandating that costs be shared based on each unit’s 1/26 interest.

• Final Outcome: The petition was definitively dismissed after the rehearing, making the ALJ’s order binding. The Association’s adoption of the 1/26 assessment rate was upheld as compliant with its governing documents.

——————————————————————————–

Background of the Dispute

The legal conflict originated from a single-issue petition filed on November 20, 2020, by Lee and Kim Edwards, owners of unit 6937 in the Scottsdale Embassy Condominium development. The petition, filed with the Arizona Department of Real Estate, alleged that the Scottsdale Embassy Condominium Association had violated its CC&Rs, specifically Article VI, Section 9, and Article IV, Section 1.

The central issue was the Association Board’s decision to change the long-standing method of calculating homeowner assessments. For over 40 years, assessments had been based on the square footage of each unit. In 2020, the Board implemented a new system where the Association’s annual budget was divided equally among the 26 units, with each owner paying a 1/26 share. The Petitioners sought to enforce the historical calculation method unless and until the CC&Rs were properly amended.

Chronology of the Assessment Change

• Historical Practice: For more than four decades, the Association calculated and charged member assessments based on the square footage of each condominium unit.

• Legal Consultation (January 2020): Two members of the Association’s Board consulted with an attorney regarding the legality of the historical assessment method.

• Attorney Recommendation (January 24, 2020): The attorney advised the Association that, to ensure compliance with the CC&Rs, it should calculate assessments based on each homeowner’s 1/26 interest in the common areas. The attorney’s letter stated:

• Homeowner Consultation: Following the legal advice, the Board informed homeowners that the prior square-footage method violated the CC&Rs. The Board sought input on three potential assessment methods: the 1/26 rate, a variable blended rate, or continuing with the square footage rate. A majority of homeowners selected the 1/26 rate. The Board noted that any method other than the 1/26 rate would require a formal amendment to the CC&Rs.

• Implementation (September 26, 2020): The Board officially notified homeowners that it would begin charging assessments based on the 1/26 rate and that an amendment to the CC&Rs was not necessary to implement this change.

Initial Hearing and Decision (February 2021)

An evidentiary hearing was held on February 9, 2021, before Administrative Law Judge Velva Moses-Thompson.

Arguments Presented

Petitioners (Edwards)

1. The historical square footage rate qualified as a “uniform rate” and was compliant with the CC&Rs.
2. By using the square footage rate for over 40 years, the Association had waived its right to enforce a different method like the 1/26 rate.

Respondent (Association)

1. The plain language of the CC&Rs requires that each homeowner pay an assessment based on the 1/26 rate.
2. It is not legally possible to waive a mandatory CC&R requirement through past practice.

On February 19, 2021, the ALJ issued a decision dismissing the petition. The judge’s conclusions of law were based on a direct interpretation of the CC&Rs:

• Uniform Rate Compliance: The ALJ determined that the “preponderance of the evidence” showed that the Association’s 1/26 rate was a uniform rate that complied with Article VI, Section 9 of the CC&Rs.

• Burden of Proof: The Petitioners failed to meet their burden to prove that the Association had violated its governing documents.

• Outcome: The Association was deemed the prevailing party, and the petition was dismissed.

Rehearing and Final Decision (July 2021)

The Petitioners filed a request for a rehearing on March 30, 2021, which was granted. The rehearing was held on July 8, 2021. The Respondent did not appear at this hearing, as its counsel had withdrawn from representation without formally notifying the tribunal.

In the rehearing, the Petitioners introduced a new argument, alleging that the 1/26 assessment method violated Arizona state law, specifically A.R.S. § 33-1255.

• The core of this argument was that the 1/26 rate improperly included charges for “limited common elements,” such as patios and assigned parking spaces.

• The Petitioners contended that this forced all homeowners to pay for the maintenance of elements that were assigned to and benefited fewer than all units, in direct violation of the statute.

On July 28, 2021, the ALJ issued a final decision, once again dismissing the petition. The ruling hinged on the precise wording of both the state statute and the Association’s Declaration.

• Applicability of A.R.S. § 33-1255: The judge found that the statute did not apply to this matter. The relevant section of the law, A.R.S. § 33-1255(C), begins with the critical phrase: “Unless otherwise provided for in the declaration…”

• Supremacy of the Declaration: The ALJ concluded that the Association’s Declaration did provide otherwise. The CC&Rs explicitly:

◦ Define “Common Elements” broadly to include patios and parking areas (Article I, Section 3).

◦ Establish that each unit has an “undivided interest in the general common areas” of 1/26 (Article I, Section 5).

◦ Mandate that each unit’s share of costs for repair and maintenance of common areas is the “same as its undivided interest in the common elements” (Article IV, Section 4(d)).

• Final Outcome: Because the Declaration’s specific provisions overrode the general terms of the state statute, the Association was found to be in compliance. The petition was dismissed, and the order was deemed binding on the parties.

Key Legal Principles and Definitions

Concept

Definition / Application in Case

Burden of Proof

The Petitioners were required to establish their claim by a “preponderance of the evidence.”

Preponderance of the Evidence

Defined as “proof as convinces the trier of fact that the contention is more probably true than not.” The ALJ found the Petitioners failed to meet this standard in both hearings.

Restrictive Covenants

Arizona law requires that unambiguous restrictive covenants be enforced to give effect to the parties’ intent and be interpreted as a whole. The ALJ’s decisions were based on a direct interpretation of the CC&Rs’ language.

Common Elements (per CC&Rs)

A broad definition including multifamily structures, land, roofs, ceilings, foundations, storage spaces, patios, parking areas, recreational facilities, lawns, pipes, and conduits.

Unit (per CC&Rs)

A freehold estate consisting of the interior space of an apartment. The definition explicitly states that common elements are not part of the unit.

Undivided Interest (per CC&Rs)

Article I, Section 5 clearly establishes that “The undivided interest in the general common areas… which shall be conveyed with each respective units shall be 1/26.” This provision was central to the final ruling.

Study Guide: Edwards v. Scottsdale Embassy Condominium Association

This study guide provides a comprehensive review of the administrative case between Lee & Kim Edwards and the Scottsdale Embassy Condominium Association, based on the provided legal decisions. It includes a short-answer quiz, an answer key, suggested essay questions, and a detailed glossary of key terms.

Short-Answer Quiz

Answer the following questions in two to three sentences each, based on the information provided in the case documents.

1. What was the central conflict between the Petitioners (Lee & Kim Edwards) and the Respondent (Scottsdale Embassy Condominium Association)?

2. For over 40 years, how did the Association historically calculate assessments for homeowners?

3. What specific event in January 2020 prompted the Association’s Board to change the assessment method?

4. In the first hearing on February 9, 2021, what were the two main arguments presented by Mr. Edwards?

5. What was the Administrative Law Judge’s conclusion regarding the “uniform rate” requirement from CC&Rs Article VI, Section 9 in the initial decision?

6. Upon what new legal grounds did the Petitioners base their March 30, 2021, request for a re-hearing?

7. According to the CC&Rs, what is the defined undivided interest in the general common areas for each unit?

8. Why did the Administrative Law Judge ultimately conclude that Arizona Revised Statutes (A.R.S.) § 33-1255 did not apply in this case?

9. What legal standard of proof did the Petitioners need to meet to successfully prove their case?

10. What was the final, binding outcome of the re-hearing held on July 8, 2021?

——————————————————————————–

Answer Key

1. The central conflict concerned the method for calculating homeowner assessments. The Petitioners argued for the historical method based on unit square footage, while the Respondent implemented a new method where each of the 26 units paid an equal share (1/26 rate) of the Association’s costs.

2. For over 40 years, the Association historically calculated assessments based on the square footage of each condominium unit. This practice was changed by the Board in 2020.

3. In January 2020, two Board members met with an attorney who advised that to comply with the CC&Rs, the Association should charge assessments based on each homeowner’s 1/26 interest in the common areas, not on square footage.

4. Mr. Edwards argued that the historical square footage rate was a “uniform rate” that complied with the CC&Rs. He also contended that by using this method for 40 years, the Association had waived its right to enforce a different assessment method like the 1/26 rate.

5. The Judge concluded that the Respondent’s assessment method, based on a uniform rate of 1/26 of the Association’s costs for each unit, did comply with Article VI, Section 9. Therefore, the Petitioners failed to prove the Association had violated the CC&Rs.

6. The Petitioners based their request for a re-hearing on the new allegation that the Respondent had violated Arizona Revised Statutes (A.R.S.) § 33-1255. They argued the 1/26 rate improperly required members to pay for limited common elements, such as patios and parking spaces, not assigned to them.

7. According to Article I, Section 5 of the Declaration (CC&Rs), the undivided interest in the general common areas established and conveyed with each respective unit is 1/26.

8. The Judge concluded that A.R.S. § 33-1255 did not apply because the statute itself contains an exception: “Unless otherwise provided for in the declaration.” In this case, the Association’s Declaration explicitly required that each member be charged an assessment equivalent to their 1/26 interest in the total costs, which included patios and parking areas.

9. The Petitioners bore the burden of proof to establish their claims by a “preponderance of the evidence.” This standard requires proof that convinces the trier of fact that a contention is more probably true than not.

10. Following the re-hearing, the Administrative Law Judge again ordered that the petition of Lee & Kim Edwards be dismissed. The Respondent was deemed the prevailing party, and the order was declared binding on the parties.

——————————————————————————–

Essay Questions

The following questions are designed for longer, essay-style responses. Answers are not provided.

1. Trace the evolution of the Petitioners’ legal strategy from the initial petition filed on November 20, 2020, to the arguments made during the re-hearing on July 8, 2021. How did their core arguments change, and what new evidence or legal statutes were introduced?

2. Analyze the concept of a “uniform rate” as required by Article VI, Section 9 of the CC&Rs. Discuss how both the Petitioners and the Respondent interpreted this phrase to support their respective assessment methods (square footage vs. 1/26 rate).

3. Explain in detail the role of A.R.S. § 33-1255 in the re-hearing. Why did the Petitioners believe it supported their case, and what specific language in both the statute and the Association’s Declaration led the Administrative Law Judge to rule that it did not apply?

4. Evaluate the actions taken by the Association’s Board of Directors in 2020. Consider their consultation with an attorney, their communication with homeowners, and their final decision to implement the 1/26 rate. Discuss whether these actions were consistent with the powers and obligations outlined in the CC&Rs.

5. Discuss the legal argument of “waiver” raised by Mr. Edwards in the first hearing. Explain what he meant by this and why the Association’s 40-year history of using a square-footage-based assessment was central to this claim. Why did this argument ultimately fail?

——————————————————————————–

Glossary of Key Terms

Definition

1/26 Rate

The assessment method where the Association’s annual budget is divided 26 ways, with each unit responsible for paying an equal portion. This is based on each unit’s 1/26 undivided interest in the common areas as specified in the CC&Rs.

Administrative Law Judge (ALJ)

The independent judicial officer who presides over administrative hearings, hears evidence, and issues a decision. In this case, the ALJ was Velva Moses-Thompson.

A.R.S. § 32-2199(1)

The Arizona Revised Statute that permits a condominium unit owner to file a petition with the Department of Real Estate for a hearing regarding alleged violations of the Condominium Act.

A.R.S. § 33-1255

The Arizona Revised Statute concerning common expenses. It states that unless the declaration provides otherwise, expenses for a limited common element shall be assessed against the units to which it is assigned, and expenses benefitting fewer than all units shall be assessed exclusively against the units benefitted.

Arizona Department of Real Estate

The state agency authorized by statute to receive and decide Petitions for Hearings from members of condominium associations in Arizona.

Burden of Proof

The obligation on a party in a legal proceeding to establish its claims by a required standard of evidence. In this case, the Petitioners bore the burden of proof.

CC&Rs (Covenants, Conditions, and Restrictions)

The governing legal documents that set up the guidelines for a planned community or condominium. Also referred to as the “Declaration” in the provided documents.

Common Area / Common Elements

As defined in Article I, Section 3 of the CC&Rs, this includes the multifamily structure (except for the units), land, air space, bearing walls, roofs, storage spaces, patios, recreational facilities, lawns, pipes, and other premises designed for common use.

Declaration

Another term for the Covenants, Conditions, and Restrictions (CC&Rs).

Lee & Kim Edwards

The Petitioners in the case and owners of unit 6937 in the Scottsdale Embassy Condominium development.

Office of Administrative Hearings

An independent state agency to which the Department of Real Estate refers petitions for evidentiary hearings.

Petitioners

The party that initiates a legal action or petition. In this case, Lee & Kim Edwards.

Preponderance of the Evidence

The evidentiary standard required to be met by the Petitioners. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

Respondent

The party against whom a petition is filed. In this case, the Scottsdale Embassy Condominium Association.

Restricted Common Area

As defined in Article I, Section 3(b) of the CC&Rs, this refers to a separately designed and exclusive parking area for each unit as assigned by the Board of Directors.

Scottsdale Embassy Condominium Association

The Respondent in the case; the condominium unit owners’ association for the development.

Square Footage Rate

The historical method of calculating assessments for over 40 years, where each unit’s assessment was based on its square footage.

Uniform Rate

A requirement from Article VI, Section 9 of the CC&Rs that states both regular and special assessments must be fixed at a uniform rate for all units. The interpretation of this term was central to the dispute.

As defined in Article I, Section 4 of the CC&Rs, a separately designated freehold estate consisting of the space bounded by the interior surfaces of the perimeter walls, floors, ceilings, windows, and floors of each apartment. It does not include common elements.

Waiver

A legal argument made by the Petitioners that because the Association had charged assessments based on square footage for 40 years, it had relinquished or “waived” its right to enforce a different method.

4 Shocking Lessons from an HOA Lawsuit That Could Upend How You See Your Fees

Introduction: The 40-Year Mistake

If you live in a condominium or a community governed by a Homeowners Association (HOA), you likely operate under a simple assumption: the way things have always been done is the correct and legal way. Monthly fees, maintenance schedules, and community rules that have been in place for decades feel permanent and unassailable. But what if they aren’t?

This was the central question in the case of Lee & Kim Edwards versus the Scottsdale Embassy Condominium Association. For over 40 years, the Association calculated homeowner fees based on the square footage of each unit—a practice that seemed fair and logical, and one that was never questioned by residents.

Then came the twist. In January 2020, after consulting with an attorney, the HOA board announced a shocking revelation: their 40-year-old assessment method was a direct violation of the community’s own governing documents. The board presented the legal findings to the community and sought their input on how to proceed. After being given the choice between the old method, a blended rate, or a new flat-rate fee that complied with the rules, most homeowners voted for the compliant flat-rate system for every single unit, regardless of its size.

Homeowners sued to keep the old method, sparking a legal battle that went all the way to an administrative court. The resulting decisions offer surprising and crucial lessons for every homeowner paying HOA dues. Here are the four most impactful takeaways from the case that could change how you view your own community’s rules.

1. “Past Practice” Means Nothing if It Violates the Rules

The primary argument made by the petitioners, Mr. and Mrs. Edwards, was that the Association had “waived its right” to change the assessment method. After all, by using the square-footage calculation for four decades, hadn’t they established an unbreakable precedent? It seemed like a common-sense argument rooted in history and consistency.

The court, however, completely rejected this line of reasoning. The Administrative Law Judge’s decision was not based on historical practice but on the clear, written rules found in the community’s Covenants, Conditions, and Restrictions (CC&Rs). The Association argued that it’s “not possible to waive the CC&R requirement,” and the court agreed.

The Lesson: This case powerfully demonstrates that tradition or “how things have always been done” cannot override the explicit language of an HOA’s governing documents. The CC&Rs are a contract. The lesson is clear: if your HOA’s practice contradicts its documents, the practice is invalid. The board has a fiduciary duty to follow the written rules, not a 40-year-old mistake.

2. Your CC&Rs Are a Binding Contract—Read Them

Throughout the legal proceedings, the Administrative Law Judge consistently referred back to the specific text of the CC&Rs to make a final decision. The entire case ultimately hinged on the interpretation of a few key sentences written decades ago.

The most critical passage, which decided the outcome, was from Article VI, Section 4(d) of the community’s governing documents:

“Each unit’s share shall be the same as its undivided interest in the common elements of the total amount determined under the subparagraphs (a), (b), (c), and (d) above.” —Scottsdale Embassy Condominium Association CC&Rs, Article VI, Section 4(d)

This single sentence was the linchpin. It explicitly linked each unit’s assessment share to its “undivided interest in the common elements.” Another section of the document, Article I, Section 5, had already established that interest as an equal 1/26 for all 26 units.

The Lesson: This is a classic example of legal cross-referencing in a contract. Section 4(d) provided the instruction (base fees on “undivided interest”), while Article I, Section 5 provided the specific value (1/26). With both parts present and unambiguous, the court had no choice but to enforce them exactly as written, leaving no room for interpretations based on fairness or history. The contract was the contract.

3. A “Uniform Rate” Might Not Mean What You Think

One of the central points of contention was the term “uniform rate.” Article VI, Section 9 of the CC&Rs required that all assessments “must be fixed at a uniform rate for all units.”

The homeowners argued that the square footage rate was, in fact, a “uniform rate”—a consistent price per square foot applied to every unit. It’s an interpretation many of us might find reasonable.

However, the HOA Board and the court had a different interpretation. The judge found that the flat 1/26 rate was the correct interpretation of a “uniform rate” because it was uniformly applied to every unit’s established 1/26 interest in the common areas. In the court’s view, the “rate” being applied uniformly was the 1/26 fraction of the total budget. The fact that this resulted in different dollar amounts for square-footage fees was irrelevant; the legal share was what had to be uniform.

The Lesson: Common-sense terms like “uniform” can have very specific legal meanings within the context of your governing documents. The true definition is found not in a dictionary, but in how the term is defined and applied by the rest of the document’s provisions.

4. Your HOA’s Rules Can Sometimes Override State Law

In a final attempt to overturn the decision, the petitioners filed for a re-hearing. This time, they cited a specific Arizona state law, A.R.S. 33-1255. This statute says that expenses for “limited common elements”—things like assigned patios or parking spaces that only benefit specific units—should be assessed only against those units that benefit from them. The homeowners argued that the new 1/26 flat fee unfairly forced them to pay for their neighbors’ patios and parking spots, a direct violation of state law.

Surprisingly, this argument also failed. The reason is found in the crucial introductory clause of the state law itself: “Unless otherwise provided for in the declaration…”

Because the Scottsdale Embassy’s Declaration did provide otherwise—by explicitly rolling all general and restricted common area costs into the total budget before calculating each unit’s 1/26 share—the community’s own rules legally superseded the default state statute. The judge concluded that the state law “does not apply to this matter because the Declaration requires” a different method.

The Lesson: This is perhaps the most counter-intuitive lesson of all. This demonstrates a key principle of contract law and planned community governance: state statutes often provide a “default” rule for situations a community’s documents don’t address. However, they also grant communities the power to create their own specific rules, which, if legally permissible, will take precedence. Homeowners cannot assume that a state law automatically protects them if their community’s own governing documents have a more specific rule in place.

Conclusion: Are You Sure You Know What You Agreed To?

The central message from the Scottsdale Embassy case is undeniable: in an HOA, the written word is law. The CC&Rs and other governing documents are a binding contract that dictates the rules, regardless of 40 years of history, common-sense assumptions, or even some default state laws. What you believe is fair or standard practice is irrelevant if the document you agreed to upon purchase says otherwise.

This case was decided by a few sentences written decades ago. When was the last time you read your community’s governing documents from cover to cover?

Case Participants

Petitioner Side

  • Lee Edwards (petitioner, witness)
  • Kim Edwards (petitioner)
  • Teresa H. Foster (petitioner attorney)
    Ellis & Baker, P.C.
    Also referred to as Terri Foster and Terry Foster

Respondent Side

  • Lauren Vie (respondent attorney)
    Appeared for initial hearing; later noted as withdrawn
  • Caleb Koch (board president, witness)
    Scottsdale Embassy Condominium Association
  • Mary Edinburgh (board member, witness)
    Scottsdale Embassy Condominium Association
  • Beth Mulcahy (respondent attorney)
    Mulcahy Law Firm, PC
    Recipient of transmission; noted as withdrawn counsel prior to rehearing

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    OAH
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient

Other Participants

  • Miranda Alvarez (unknown)
    Associated with transmission for petitioner's attorney

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

Posted on by

Case Summary

Case ID 21F-H2120024-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-02-16
Administrative Law Judge Tammy L. Eigenheer
Outcome 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.
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 2026-04-24T11:31:43 (95.8 KB)

21F-H2120024-REL Decision – 855401.pdf

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

This is a concise summary of the Administrative Law Judge Decision in the matter of *Aaron Ricks (Somerstone Properties, LLC) v. Montelena Master Community Association*.

Concise Summary of Administrative Hearing

Key Facts and Parties

The hearing took place on January 27, 2021, before Administrative Law Judge Tammy L. Eigenheer. Petitioner, Aaron Ricks, filed a Homeowners Association (HOA) Dispute Process Petition on or about October 27, 2020, alleging violations of community documents and statute. The dispute centered on alleged "unlawful fees ($5,000 in total)" that Petitioner claimed he was forced to pay to sell his home. The specific fee at issue was a $2500.00 transfer fee charged to the purchaser each time a parcel was sold.

Main Issues and Legal Basis

The core issue for the hearing was whether the Respondent, Montelena Master Community Association, violated A.R.S. § 33-1806, A.R.S. § 33-442, and the Association’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) Article 6.9.2/6.9.2.9, specifically regarding the imposition of the transfer fee.

The legal focus was A.R.S. § 33-442, which generally prohibits transfer fees but provides exceptions. The key exception cited was A.R.S. § 33-442(C)(3), which allows fees if they are used exclusively for a purpose authorized in the document, touch and concern the land, and are not passed through to a specific third party or declarant (unless authorized to manage property or part of an approved development plan).

Key Arguments

  1. Respondent’s Position (Motion for Summary Judgment): Respondent filed a Motion for Summary Judgment arguing the Petition should be dismissed because the CC&Rs (Sections 7.15 and 6.6) authorized the fee, which touched and concerned the land. A 2010 Board Resolution specified the Transfer Fee was "to be used exclusively to fund the Master Association’s operating expenses and/or the Master Association’s reserves". Counsel argued this usage was sufficient to meet A.R.S. § 33-442(C) requirements. Respondent also asserted that the CC&R sections cited by the Petitioner (6.9.2 and 6.9.2.9) addressed a "Contribution to Reserves," not the specific Transfer Fee being contested.
  2. Petitioner’s Position: Petitioner acknowledged the statutory exception but argued that the transfer fee must be used for a very specific limited purpose (e.g., a swimming pool or landscaping project), rather than a general purpose like operating expenses or reserves, for the fee to be compliant with A.R.S. § 33-442. Petitioner also asserted that specific CC&R sections precluded the fee. (Petitioner offered no argument regarding A.R.S. § 33-1806).

Legal Points and Outcome

The Administrative Law Judge (ALJ) noted that the Petitioner bore the burden of proof to establish violations by a preponderance of the evidence.

The ALJ determined that Petitioner failed to establish a violation of the community documents and A.R.S. § 33-442. Crucially, Petitioner offered no legal authority to support his interpretation that A.R.S. § 33-442 required the transfer fee to be designated for a more specific purpose than the association’s operating expenses and/or reserves identified in the governing documents.

The final decision was that Petitioner’s petition is dismissed. This decision was done on February 16, 2021.

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

The Sun Groves Homeowners Association v. David L & Makenzie Lockhart

Posted on by

Case Summary

Case ID 21F-H2120019-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-02-10
Administrative Law Judge Adam D. Stone
Outcome The Petitioner (HOA) prevailed as the Respondents stipulated they violated the CC&R Article 10.11.1 concerning parking, and were ordered to pay the Petitioner's $500.00 filing fees.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Sun Groves Homeowners Association Counsel Robert H. Willis, Esq.
Respondent David L. and Stephanie J. Lockhart Counsel Andrew Ellis, Esq.

Alleged Violations

Article 10.11.1 of the SGHA CC&R’s

Outcome Summary

The Petitioner (HOA) prevailed as the Respondents stipulated they violated the CC&R Article 10.11.1 concerning parking, and were ordered to pay the Petitioner's $500.00 filing fees.

Why this result: Respondents stipulated that they were in violation of Article 10.11.1 of the SGHA CC&R’s.

Key Issues & Findings

Violation of parking restrictions

Respondents stipulated that they were in violation of the SGHA CC&R’s regarding parking restrictions.

Orders: Petition granted; Respondents assessed the cost of Petitioner’s filing fees in the amount of $500.00.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 32-2199(B)

Analytics Highlights

Topics: Stipulation, CC&R Violation, Parking
Additional Citations:

  • A.R.S. § 32-2199(B)
  • Title 33, Chapter 16

Video Overview

Audio Overview

Decision Documents

21F-H2120019-REL Decision – 854057.pdf

Uploaded 2026-04-24T11:30:59 (84.7 KB)

21F-H2120019-REL Decision – 854057.pdf

Uploaded 2026-01-23T17:35:42 (84.7 KB)

The administrative legal case hearing, *The Sun Groves Homeowners Association (SGHA) v. David L. and Stephanie J. Lockhart*, was held on February 9, 2021, before the Office of Administrative Hearings (OAH). The proceeding was overseen by Administrative Law Judge Adam D. Stone.

Key Facts and Jurisdiction

The Petitioner, Sun Groves Homeowners Association, is a planned community organization. Respondents, David L. and Stephanie J. Lockhart, are homeowners and members of SGHA. The case was filed with the Arizona Department of Real Estate (ADRE), which, along with the OAH, is authorized by A.R.S. § 32-2199(B) to hear petitions regarding violations of planned community documents.

Main Issue and Legal Points

SGHA filed a complaint alleging that the Lockharts were in violation of Article 10.11.1 of the SGHA CC&R’s. This specific article restricts the parking of private passenger automobiles or pickup trucks, requiring them to be parked within a garage, in a private driveway, or in Board-designated areas. The most critical legal point of the hearing was that the Respondents stipulated (agreed) that they were in violation of Article 10.11.1 of the CC&R’s. The Respondents also stipulated that SGHA was the prevailing party in the matter.

Final Decision and Outcome

Pursuant to the stipulation of the parties, the tribunal issued a Conclusion of Law finding that the Respondents had violated Article 10.11.1 of the SGHA CC&R’s. The Administrative Law Judge granted the Petitioners’ petition. As the prevailing party, SGHA was awarded costs, and the Lockharts were ordered to pay Petitioner’s filing fees in the amount of $500.00. The Order became binding unless a request for rehearing was filed with the Commissioner of the Department of Real Estate within 30 days.

Questions

Question

Can my HOA restrict parking on the street or in front of my house?

Short Answer

Yes, if the CC&Rs specifically restrict parking to garages or driveways.

Detailed Answer

The ALJ upheld a CC&R provision that prohibited parking private passenger automobiles or pickup trucks anywhere on the property or adjacent roadways, except within a garage or private driveway.

Alj Quote

No private passenger automobiles or pickup trucks shall be parked upon the Property or any roadway adjacent thereto except within a garage, in a private driveway appurtenant to a Dwelling Unit, or within areas designated for such purpose by the Board.

Legal Basis

CC&R Article 10.11.1

Topic Tags

  • Parking
  • CC&Rs
  • Restrictions

Question

If I admit to a violation during a hearing, what happens?

Short Answer

The judge will accept the admission and issue a finding that the violation occurred.

Detailed Answer

When a homeowner stipulates (agrees) that they were in violation of a specific rule, the tribunal accepts this admission as fact and rules accordingly without needing further evidence.

Alj Quote

Pursuant to the stipulation of the parties, the tribunal finds that Respondents violated Article 10.11.1 of the SGHA CC&R’s.

Legal Basis

Stipulation of Parties

Topic Tags

  • Hearing Procedure
  • Stipulation
  • Evidence

Question

Can the HOA force me to pay their filing fees if they win?

Short Answer

Yes, the judge can order the homeowner to pay the HOA's filing fees.

Detailed Answer

In this case, the homeowners agreed to pay the HOA's $500.00 filing fee as part of the stipulation that the HOA was the prevailing party, and the judge ordered this assessment.

Alj Quote

IT IS FURTHER ORDERED assessing the cost of Petitioner’s filing fees in the amount of $500.00.

Legal Basis

Administrative Order

Topic Tags

  • Fines
  • Fees
  • Costs

Question

Does the Department of Real Estate have authority to hear HOA violation cases?

Short Answer

Yes, state law allows owners or HOAs to file petitions regarding violations of community documents.

Detailed Answer

Arizona statute permits planned community organizations (HOAs) or owners to file petitions with the Department regarding violations, which are then heard by the Office of Administrative Hearings.

Alj Quote

A.R.S. § 32-2199(B) permits an owner or a planned community organization to file a petition with the Department for a hearing concerning violations of planned community documents under the authority Title 33, Chapter 16.

Legal Basis

A.R.S. § 32-2199(B)

Topic Tags

  • Jurisdiction
  • ADRE
  • Process

Question

Is the Administrative Law Judge's decision final?

Short Answer

Yes, the order is binding unless a rehearing is granted.

Detailed Answer

The decision issued by the ALJ is legally binding on both the homeowner and the HOA unless a request for a rehearing is successfully granted.

Alj Quote

Pursuant to A.R.S. §32-2199.02(B), this Order is binding on the parties unless a rehearing is granted pursuant to A.R.S. § 32-2199.04.

Legal Basis

A.R.S. § 32-2199.02(B)

Topic Tags

  • Legal Status
  • Appeals
  • Binding Order

Question

How much time do I have to appeal or request a rehearing?

Short Answer

You must file a request for rehearing within 30 days of the service of the order.

Detailed Answer

If a party wishes to challenge the decision, they must file a request for a rehearing with the Commissioner of the Department of Real Estate within 30 days.

Alj Quote

Pursuant to A.R.S. § 41-1092.09, a request for rehearing in this matter must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of this Order upon the parties.

Legal Basis

A.R.S. § 41-1092.09

Topic Tags

  • Appeals
  • Deadlines
  • Procedure

Case

Docket No
21F-H2120019-REL
Case Title
The Sun Groves Homeowners Association vs. David L & Makenzie Lockhart
Decision Date
2021-02-10
Alj Name
Adam D. Stone
Tribunal
OAH
Agency
ADRE

Questions

Question

Can my HOA restrict parking on the street or in front of my house?

Short Answer

Yes, if the CC&Rs specifically restrict parking to garages or driveways.

Detailed Answer

The ALJ upheld a CC&R provision that prohibited parking private passenger automobiles or pickup trucks anywhere on the property or adjacent roadways, except within a garage or private driveway.

Alj Quote

No private passenger automobiles or pickup trucks shall be parked upon the Property or any roadway adjacent thereto except within a garage, in a private driveway appurtenant to a Dwelling Unit, or within areas designated for such purpose by the Board.

Legal Basis

CC&R Article 10.11.1

Topic Tags

  • Parking
  • CC&Rs
  • Restrictions

Question

If I admit to a violation during a hearing, what happens?

Short Answer

The judge will accept the admission and issue a finding that the violation occurred.

Detailed Answer

When a homeowner stipulates (agrees) that they were in violation of a specific rule, the tribunal accepts this admission as fact and rules accordingly without needing further evidence.

Alj Quote

Pursuant to the stipulation of the parties, the tribunal finds that Respondents violated Article 10.11.1 of the SGHA CC&R’s.

Legal Basis

Stipulation of Parties

Topic Tags

  • Hearing Procedure
  • Stipulation
  • Evidence

Question

Can the HOA force me to pay their filing fees if they win?

Short Answer

Yes, the judge can order the homeowner to pay the HOA's filing fees.

Detailed Answer

In this case, the homeowners agreed to pay the HOA's $500.00 filing fee as part of the stipulation that the HOA was the prevailing party, and the judge ordered this assessment.

Alj Quote

IT IS FURTHER ORDERED assessing the cost of Petitioner’s filing fees in the amount of $500.00.

Legal Basis

Administrative Order

Topic Tags

  • Fines
  • Fees
  • Costs

Question

Does the Department of Real Estate have authority to hear HOA violation cases?

Short Answer

Yes, state law allows owners or HOAs to file petitions regarding violations of community documents.

Detailed Answer

Arizona statute permits planned community organizations (HOAs) or owners to file petitions with the Department regarding violations, which are then heard by the Office of Administrative Hearings.

Alj Quote

A.R.S. § 32-2199(B) permits an owner or a planned community organization to file a petition with the Department for a hearing concerning violations of planned community documents under the authority Title 33, Chapter 16.

Legal Basis

A.R.S. § 32-2199(B)

Topic Tags

  • Jurisdiction
  • ADRE
  • Process

Question

Is the Administrative Law Judge's decision final?

Short Answer

Yes, the order is binding unless a rehearing is granted.

Detailed Answer

The decision issued by the ALJ is legally binding on both the homeowner and the HOA unless a request for a rehearing is successfully granted.

Alj Quote

Pursuant to A.R.S. §32-2199.02(B), this Order is binding on the parties unless a rehearing is granted pursuant to A.R.S. § 32-2199.04.

Legal Basis

A.R.S. § 32-2199.02(B)

Topic Tags

  • Legal Status
  • Appeals
  • Binding Order

Question

How much time do I have to appeal or request a rehearing?

Short Answer

You must file a request for rehearing within 30 days of the service of the order.

Detailed Answer

If a party wishes to challenge the decision, they must file a request for a rehearing with the Commissioner of the Department of Real Estate within 30 days.

Alj Quote

Pursuant to A.R.S. § 41-1092.09, a request for rehearing in this matter must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of this Order upon the parties.

Legal Basis

A.R.S. § 41-1092.09

Topic Tags

  • Appeals
  • Deadlines
  • Procedure

Case

Docket No
21F-H2120019-REL
Case Title
The Sun Groves Homeowners Association vs. David L & Makenzie Lockhart
Decision Date
2021-02-10
Alj Name
Adam D. Stone
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Robert H. Willis (attorney)
    Burdman Willis, PLLC

Respondent Side

  • David L. Lockhart (respondent)
  • Stephanie J. Lockhart (respondent)
    Proper co-Respondent in this matter
  • Makenzie Lockhart (listed respondent)
    Respondent’s daughter
  • Andrew Ellis (attorney)

Neutral Parties

  • Adam D. Stone (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Erik R. Pierce v. Sierra Morado Community Association

Posted on by

Case Summary

Case ID 20F-H2020053-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-02-10
Administrative Law Judge Adam D. Stone
Outcome The Administrative Law Judge denied the petition, concluding that the Respondent HOA did not violate CC&R Section 11.1 because that section grants the Board discretion, rather than a mandatory obligation, in the timing of enforcement actions.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Erik R. Pierce Counsel James C. Frisch
Respondent Sierra Morado Community Association Counsel Nicholas C.S. Nogami and Heather M. Hampstead

Alleged Violations

Article 11, Section 11.1

Outcome Summary

The Administrative Law Judge denied the petition, concluding that the Respondent HOA did not violate CC&R Section 11.1 because that section grants the Board discretion, rather than a mandatory obligation, in the timing of enforcement actions.

Why this result: The Petitioner failed to meet the burden of proof to establish that the Respondent violated CC&R Section 11.1, as the ALJ found the Board's decision to temporarily delay enforcement pending litigation and settlement discussions fell within the discretion granted by the CC&R.

Key Issues & Findings

Failure of HOA to Enforce Architectural Approval Conditions (Hot Tub Screening)

Petitioner alleged that the HOA failed to enforce the mandatory installation of a pergola and screening around a neighbor's hot tub, a condition imposed by the Architectural Review Committee when retroactively approving the installation.

Orders: Petitioner's petition is denied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 32-2199(B)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • CC&R Article 11, Section 11.1
  • CC&R Article 4, Section 4.27

Analytics Highlights

Topics: HOA Enforcement, CC&R Dispute, Architectural Control, Discretionary Enforcement
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.07(G)(2)
  • A.R.S. § 41-1092.09
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • CC&R Article 4, Section 4.27
  • CC&R Article 11, Section 11.1
  • 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)

Video Overview

Audio Overview

Decision Documents

20F-H2020053-REL Decision – 850237.pdf

Uploaded 2026-04-26T09:52:48 (43.0 KB)

20F-H2020053-REL Decision – 850239.pdf

Uploaded 2026-04-26T09:52:51 (7.1 KB)

20F-H2020053-REL Decision – 853778.pdf

Uploaded 2026-04-26T09:52:54 (119.9 KB)

20F-H2020053-REL Decision – 850237.pdf

Uploaded 2026-01-23T17:32:29 (43.0 KB)

20F-H2020053-REL Decision – 850239.pdf

Uploaded 2026-01-23T17:32:31 (7.1 KB)

20F-H2020053-REL Decision – 853778.pdf

Uploaded 2026-01-23T17:32:32 (119.9 KB)

Administrative Hearing Briefing: Pierce v. Sierra Morado Community Association

Executive Summary

This briefing synthesizes the key findings and judicial decision in the administrative case of Erik R. Pierce versus the Sierra Morado Community Association (SMCA), Case No. 20F-H2020053-REL. The petition, filed by homeowner Erik R. Pierce, was ultimately denied by the Administrative Law Judge on February 10, 2021.

The core of the dispute was Pierce’s allegation that the SMCA failed to enforce its Covenants, Conditions, and Restrictions (CC&Rs) against his neighbors, the Kinstles, who installed a hot tub visible from Pierce’s property, creating a privacy violation. While the SMCA Board retroactively approved the hot tub, it did so with the explicit condition that a pergola and screening be installed to mitigate the visibility issue. The Kinstles subsequently failed to install the required screening.

The judge concluded that the SMCA’s conditional approval resolved the initial violation claim under CC&R Section 4.27. The central issue then became whether the SMCA’s subsequent failure to compel the installation of the screening constituted a violation of its enforcement duty under CC&R Section 11.1. The judge ruled that it did not, finding that the CC&Rs grant the Association a discretionary right to enforce its rules, not an absolute obligation. The judge found persuasive the SMCA’s testimony that it delayed enforcement actions due to the ongoing litigation and in an attempt to foster a settlement between the neighbors. This exercise of discretion was deemed permissible under the Association’s governing documents.

1. Case Overview

Parties and Legal Representation

Entity

Legal Counsel

Petitioner

Erik R. Pierce

James C. Frisch, Esq. & Michael Resare, Esq. (King & Frisch, P.C.)

Respondent

Sierra Morado Community Association (SMCA)

Heather M. Hampstead, Esq. & Nicholas C.S. Nogami, Esq. (Carpenter, Hazlewood, Delgado & Bolen, LLP)

Key Case Details

• Case Number: 20F-H2020053-REL

• Presiding Judge: Adam D. Stone, Administrative Law Judge

• Hearing Date: January 25, 2021 (conducted via Google Meet)

• Decision Date: February 10, 2021

• Jurisdiction: The Arizona Department of Real Estate (ADRE) is statutorily authorized to hear petitions from homeowners’ association members. This case was referred by the ADRE to the Office of Administrative Hearings for an evidentiary hearing.

2. Core Dispute and Allegations

Petitioner’s Complaint

On March 23, 2020, Erik R. Pierce filed a complaint with the ADRE alleging that the SMCA was in violation of its own CC&Rs, specifically Sections 4.27 (Swimming Pools and Spas) and 11.1 (Enforcement).

The dispute originated with the installation of a hot tub by Pierce’s neighbors, the Kinstles. Pierce testified that the hot tub and its occupants were visible from inside his house, and that occupants of the hot tub could look directly into his home, violating his right to privacy.

Timeline of Key Events

• September 4, 2019: Pierce submits his initial complaint to the SMCA, noting the hot tub’s visibility and asserting that the Kinstles had failed to obtain prior approval from the Architectural Review Committee (ARC).

• Post-September 2019: The SMCA informs the Kinstles that they installed the hot tub without approval and directs them to submit plans for the proper approval process.

• February 10, 2020: After several rejections, the SMCA Board approves the Kinstles’ hot tub installation on the condition that a pergola and screening are installed.

• March 3, 2020: Pierce receives a letter from the property management company, AAM, LLC, stating that the installation was approved with the screening requirement and that the complaint was closed.

• January 25, 2021: At the time of the hearing, the Kinstles had still not installed the required pergola and screening.

3. Analysis of Key Testimonies

The decision was informed by testimony from four witnesses presented by the Petitioner.

• Erik R. Pierce (Petitioner): Outlined the timeline of the dispute, the visibility of the neighbors’ hot tub, the resulting privacy violation, and the SMCA Board’s failure to enforce its own conditional approval requiring a pergola and screening.

• Bill Oliver (Former SMCA President, Fall 2019 – April 2020): Confirmed that the Board approved the hot tub retroactively with the stipulation for a pergola and screening. He stated the Board had a “rigorous process of enforcement” but could not recall if a specific violation letter was sent to the Kinstles after the conditional approval was granted.

• Jodie Cervantes (Former Community Manager, 2019 – June 2020): Testified that she believed the CC&Rs were enforced and the matter was closed. She suggested the Kinstles had a six-month period to comply with the screening requirement, which she believed was in the Design Guidelines, but could not point to the specific language.

• Martin Douglas (Current SMCA President, from April 2020): Stated he had been to the Pierce residence for another matter and the hot tub was not visible to him. He attributed the lack of enforcement action to the “ongoing litigation and multiple settlement offers which were being exchanged.” He testified that upon resolution of the case, the Board “will follow through with enforcement actions should the Kinstle’s fail to comply.”

4. Judicial Reasoning and Decision

The Administrative Law Judge’s decision centered on the interpretation of the SMCA’s CC&Rs and the discretionary power of its Board.

Governing CC&R Provisions

The ruling rested on the specific language of two sections of the SMCA CC&Rs:

• Section 4.27 (Swimming Pools and Spas): This section permits the installation of a hot tub only if it is “properly screened… if neither it nor its occupants are Visible from Neighboring Property, and with the prior written approval of the Architectural Review Committee.”

• Section 11.1 (Enforcement): This section states that “The Association or any Owner shall have the right to enforce the Project Documents… The failure of the Association or an Owner to take enforcement action with respect to a violation of the Project Documents shall not constitute or be deemed a waiver of the right of the Association or any Owner to enforce the Project Documents in the future.”

Administrative Law Judge’s Conclusions

1. Resolution of the Section 4.27 Claim: The judge determined that the initial issue regarding the unapproved hot tub “was essentially resolved by the Board instructing the Kinstle’s erect a pergola and install screening.” By making its approval conditional on a privacy solution, the Board addressed the core requirement of the section.

2. The “Heart of the Matter” – Section 11.1 Enforcement: The judge identified the central question as whether the SMCA violated Section 11.1 by failing to enforce the screening requirement against the Kinstles.

3. Discretionary vs. Mandatory Enforcement: The judge concluded that the language of Section 11.1 grants the Board a “right to enforce, not an absolute obligation.”

4. Rationale for Delayed Enforcement: The judge found the testimony of the current SMCA President, Martin Douglas, to be “more persuasive.” Douglas’s explanation—that the Board delayed enforcement to “foster an agreement with the neighbors” amid ongoing litigation—was accepted as a valid exercise of the Board’s discretion.

5. Final Ruling: The judge stated, “Section 11.1 expressly granted the Board this discretion, and it should not be disturbed.” Consequently, the judge ruled that the Petitioner failed to prove by a preponderance of the evidence that the Respondent had violated CC&R Section 11.1.

Final Order

IT IS ORDERED that Petitioners’ petition is denied.

The order was issued on February 10, 2021, and is binding unless a rehearing is granted.

Study Guide: Pierce v. Sierra Morado Community Association (Case No. 20F-H2020053-REL)

This study guide provides a review of the administrative hearing concerning the dispute between Erik R. Pierce and the Sierra Morado Community Association. It includes a short-answer quiz, an answer key, suggested essay questions, and a comprehensive glossary of terms and entities involved in the case.

Short-Answer Quiz

Answer each of the following questions in two to three complete sentences, based on the provided source documents.

1. Who were the primary parties in this case, and what were their respective roles?

2. What was the initial reason for Mr. Pierce’s complaint against his neighbors, the Kinstles?

3. Which two sections of the Sierra Morado Community Association (SMCA) CC&Rs did Mr. Pierce allege were violated?

4. What action did the SMCA Board take after being informed that the Kinstles had installed a hot tub without prior approval?

5. What specific conditions did the SMCA Board require for the retroactive approval of the Kinstles’ hot tub installation?

6. According to former Board President Bill Oliver’s testimony, what was the Board’s common practice regarding architectural requests made after an installation?

7. What reason did Community Manager Jodie Cervantes give for her belief that no further enforcement action could be taken against the Kinstles?

8. According to current SMCA Board President Martin Douglas, why had the Board delayed enforcement actions against the Kinstles?

9. What was the Administrative Law Judge’s final decision regarding the alleged violation of CC&R Section 11.1?

10. How did the judge interpret the Board’s enforcement power as described in Section 11.1 of the CC&Rs?

——————————————————————————–

Answer Key

1. The primary parties were Erik R. Pierce, who was the Petitioner filing the complaint, and the Sierra Morado Community Association (SMCA), which was the Respondent. Mr. Pierce is a homeowner and member of the SMCA.

2. Mr. Pierce’s complaint originated because his neighbors, the Kinstles, installed a hot tub that was visible from his backyard. He testified that occupants in the hot tub were visible from inside his house, violating his privacy.

3. The Petitioner, Mr. Pierce, alleged that the Respondent, SMCA, was in violation of sections 4.27 and 11.1 of the SMCA CC&Rs. Section 4.27 pertains to the installation of spas, and Section 11.1 addresses the enforcement of project documents.

4. After Mr. Pierce filed his complaint, the SMCA informed the Kinstles that they had installed the hot tub without approval. The Board then directed the Kinstles to submit their plans and go through the proper architectural approval process.

5. The Kinstles’ hot tub was approved retroactively on February 10, 2020, on the condition that they install a pergola and screening. This was intended to address the visibility of the hot tub from Mr. Pierce’s property.

6. Bill Oliver, the SMCA President from fall 2019 to April 2020, testified that the Board would approve architectural requests retroactively. He confirmed that this is what occurred in the case of the Kinstles’ hot tub.

7. Jodie Cervantes, the Community Manager, testified that she believed the matter was closed because the Kinstles had six months to comply with the pergola and screening requirements. She believed this six-month deadline was outlined in the Design Guidelines, though she could not locate the specific language.

8. Martin Douglas, who became Board President in April 2020, testified that the Board delayed enforcement actions due to the ongoing litigation. He stated that multiple settlement offers were being exchanged in an effort to foster an agreement between the neighbors.

9. The Administrative Law Judge ordered that the Petitioner’s petition be denied. The judge concluded that Mr. Pierce did not establish by a preponderance of the evidence that the SMCA had violated CC&R Section 11.1.

10. The judge determined that Section 11.1 grants the Board a right to enforce the rules, not an absolute obligation to do so. This interpretation means the Board has the discretion to delay enforcement, which it did in this case to facilitate a potential settlement.

——————————————————————————–

Essay Questions

The following questions are designed for longer, essay-style responses. Use evidence and testimony from the case documents to construct a thorough analysis. No answers are provided.

1. Explain the legal standard of “preponderance of the evidence” as defined in the Administrative Law Judge’s decision. Analyze why the Petitioner, Erik R. Pierce, failed to meet this burden of proof concerning the violation of CC&R Section 11.1.

2. Trace the timeline of events from Mr. Pierce’s initial complaint on September 4, 2019, to the final decision on February 10, 2021. Discuss the key actions, delays, and decisions made by the SMCA Board during this period.

3. Compare and contrast the testimonies of Bill Oliver, Jodie Cervantes, and Martin Douglas. How do their different roles and timeframes with the SMCA shape their perspectives on the association’s enforcement process and the specific handling of the Kinstle case?

4. Analyze the Administrative Law Judge’s interpretation of CC&R Section 11.1. Discuss the distinction made between a “right to enforce” and an “absolute obligation,” and explain how this interpretation was central to the final ruling.

5. Based on the judge’s findings and the testimony of Martin Douglas, what are the likely next steps for the SMCA regarding the Kinstles’ non-compliance with the pergola and screening requirement? Evaluate the potential for future conflict or resolution between the parties involved.

——————————————————————————–

Glossary of Key Terms

Term / Entity

Definition

AAM, LLC

The property management company that employed Community Manager Jodie Cervantes and managed the Sierra Morado Community Association during the period of the dispute.

Administrative Law Judge (ALJ)

The official who presides over administrative hearings. In this case, the ALJ was Adam D. Stone of the Office of Administrative Hearings.

Architectural Committee (ARC)

The committee within the SMCA responsible for approving construction, installations, and alterations to properties, as referenced in CC&R Section 4.27.

Arizona Department of Real Estate (ADRE)

The state agency authorized by statute to receive and decide Petitions for Hearing from members of homeowners’ associations. Mr. Pierce filed his initial complaint with this department.

Burden of Proof

The obligation on a party in a legal case to prove its allegations. In this case, the Petitioner had the burden to establish his claim by a “preponderance of the evidence.”

Covenants, Conditions, and Restrictions. These are the governing documents or rules of a planned community. The dispute centered on alleged violations of Sections 4.27 (Swimming Pools and Spas) and 11.1 (Enforcement).

Hearing

The formal proceeding held on January 25, 2021, where the parties presented exhibits and witness testimony to the Administrative Law Judge.

Office of Administrative Hearings

An independent state agency that conducts evidentiary hearings for other state agencies, such as the Department of Real Estate.

Petitioner

The party who files a petition or complaint to initiate a legal proceeding. In this case, the Petitioner was Erik R. Pierce.

Preponderance of the Evidence

The evidentiary standard required for the Petitioner to win the case. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

Respondent

The party against whom a petition or complaint is filed. In this case, the Respondent was the Sierra Morado Community Association (SMCA).

Retroactive Approval

The act of approving an architectural installation (such as a hot tub) after it has already been completed, which the SMCA Board did in this case.

Sierra Morado Community Association (SMCA)

The homeowners’ association in Tucson, Arizona, of which Erik R. Pierce and the Kinstles are members.

Stipulation

An agreement between the parties in a legal proceeding. In this case, the parties stipulated to enter all submitted exhibits into the record.

Your HOA Can Ignore Its Own Rules? A Surprising Legal Case Every Homeowner Needs to Understand

Introduction: The Homeowner’s Dilemma

Most homeowners in a planned community operate under a simple assumption: if a neighbor violates a clear rule, you can file a complaint, and the Homeowners Association (HOA) is required to take action. It’s the fundamental promise of an HOA—consistent enforcement to protect property values and quality of life.

But what happens when the HOA agrees a violation has occurred, demands a fix, and then… does nothing to enforce it?

A real-world legal case, Erik R. Pierce versus the Sierra Morado Community Association, provides a surprising and cautionary answer. The final court decision reveals a critical loophole that may exist in your own HOA agreement. This article will break down the three most counter-intuitive takeaways from that case that every homeowner should understand.

Takeaway 1: “A Right to Enforce” Isn’t an “Obligation to Enforce”

The core of the dispute was straightforward. Homeowner Erik Pierce filed a complaint because his neighbors, the Kinstles, installed a hot tub that was visible from his property, a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs)—the legally binding rules that govern the community. The HOA’s Architectural Committee retroactively approved the hot tub, but only on the condition that the neighbors install a pergola and screening to shield it from view.

The neighbors never installed the required screening, yet the HOA took no further enforcement action. This inaction led Mr. Pierce to sue the HOA.

The judge’s decision hinged on a crucial interpretation of the HOA’s governing documents. The judge ruled in favor of the HOA because the documents gave the Board the right to enforce the rules, not an absolute obligation to do so. This distinction granted the HOA discretion to choose its strategy. The judge found the board’s reasoning for the delay persuasive: it was deliberately choosing negotiation over immediate punitive action to resolve the conflict. The board’s discretion wasn’t just a right to do nothing; it was a right to choose a different path to compliance.

The key phrase here is “shall have the right to enforce.” Had the documents stated the board “shall enforce,” the outcome would likely have been entirely different. This single phrase transforms enforcement from a mandate into a strategic option for the board.

The Administrative Law Judge’s decision highlights this critical point:

“…Section 11.1 only gives the Board a right to enforce, not an absolute obligation. While Petitioner is understandably upset that there has yet to be any follow through on enforcement of the screening requirements, this tribunal finds the testimony of Mr. Douglas more persuasive, namely that the Board has delayed in enforcing because it was trying to foster an agreement with the neighbors. Section 11.1 expressly granted the Board this discretion, and it should not be disturbed.”

This finding is shocking for most homeowners, who reasonably assume that the rules laid out in their CC&Rs are mandates for the board, not a menu of discretionary options.

Takeaway 2: Suing Your HOA Can Ironically Pause Enforcement

The board’s discretionary power was put on full display when Mr. Pierce filed his lawsuit, creating a legal Catch-22. The current SMCA Board President, Martin Douglas, testified that the board deliberately paused formal enforcement actions against the neighbors who had violated the architectural requirement.

The judge ultimately found that the board’s rationale for this pause was a valid exercise of its discretion. The decision to delay was framed not as inaction, but as a strategic choice “to foster an agreement with the neighbors” amidst the complexities of litigation.

This reveals a deep irony: by filing a petition to force the HOA’s hand, the homeowner inadvertently provided the context for the HOA to justify a delay. The judge accepted that the board’s attempt to find a negotiated solution instead of escalating fines and penalties during an active lawsuit was a reasonable use of its discretionary authority. This case demonstrates how legal action, intended to accelerate a resolution, can sometimes be used by an HOA board to justify a different, slower approach.

Takeaway 3: A Clear Rule Violation Doesn’t Guarantee a Win in Court

One of the most surprising aspects of this case is that the facts of the violation were not in dispute. The judge explicitly acknowledged that the neighbors were in violation of the Architectural Review Committee’s requirement. The official decision states:

“Based upon the evidence provided, the Kinstle’s are in violation of the requirement the ARC Committee imposed on them.”

Despite this clear violation by the neighbor, the homeowner, Mr. Pierce, still lost his case against the HOA.

The case was lost on a critical legal distinction: the lawsuit was not about the neighbor’s violation, but about the HOA’s alleged failure to act. Since the judge determined the HOA had the discretionary right—not the mandatory obligation—to enforce the rule, its choice to pursue negotiation rather than immediate punitive action was not considered a violation of its duties.

The lesson here is profound: proving a neighbor is breaking the rules is only the first step. To win a case against your HOA for non-enforcement, you must also prove that its response (or lack thereof) constitutes a breach of its specific duties as outlined in your community’s governing documents.

Conclusion: Know Your Documents, Temper Your Expectations

The case of Pierce v. Sierra Morado Community Association serves as a stark reminder that HOA governance is often more complex than it appears. The precise wording of your community’s CC&Rs is critically important, as a single phrase can be the difference between a mandatory duty and a discretionary power. This case illustrates that the gap between a rule existing on paper and the board’s power to enforce it can be vast.

As a homeowner, your first step should be to obtain a copy of your community’s most recent CC&Rs and search for the enforcement clause—does it say your board “shall” enforce the rules, or does it say they have the “right” to?

This case forces every homeowner to ask: If your governing documents give your board the ‘right’ to act, what leverage do you truly have to ensure they actually will?

Case Participants

Petitioner Side

  • Erik R. Pierce (petitioner)
  • James C. Frisch (petitioner attorney)
    King & Frisch, P.C.
  • Michael Resare (petitioner attorney)

Respondent Side

  • Nicholas C.S. Nogami (respondent attorney)
    Carpenter, Hazlewood, Delgado & Bolen, LLP
  • Heather M. Hampstead (respondent attorney)
    Carpenter, Hazlewood, Delgado & Bolen, LLP
  • Jodie Cervantes (property manager/witness)
    AAM, LLC
    Community Manager for Respondent SMCA
  • Bill Oliver (board member/witness)
    Former SMCA President (Fall 2019 to April 2020)
  • Martin Douglas (board member/witness)
    Current SMCA Board President (since April 2020)

Neutral Parties

  • Adam D. Stone (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • LDettorre (unknown)
    Arizona Department of Real Estate
    Transmission recipient
  • AHansen (unknown)
    Arizona Department of Real Estate
    Transmission recipient
  • djones (unknown)
    Arizona Department of Real Estate
    Transmission recipient
  • DGardner (unknown)
    Arizona Department of Real Estate
    Transmission recipient
  • ncano (unknown)
    Arizona Department of Real Estate
    Transmission recipient
  • c. serrano (clerk)
    Signed document transmission

Thomas W Sweeney v. Warner Ranch Landing Association

Posted on by

Case Summary

Case ID 21F-H2120027-REL
Agency Arizona Department of Real Estate
Tribunal —
Decision Date 2021-02-04
Administrative Law Judge —
Outcome Petition dismissed.
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Thomas W. Sweeney Counsel Pro Se
Respondent Warner Ranch Landing Association Counsel Austin Baillio, Esq.

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

21F-H2120027-REL Decision – 852845.pdf

Uploaded 2026-04-24T11:31:56 (102.5 KB)

Briefing Document: Sweeney vs. Warner Ranch Landing Association (Case No. 21F-H2120027-REL)

Executive Summary

On February 4, 2021, Administrative Law Judge Sondra J. Vanella issued a decision in the matter of Thomas W. Sweeney vs. Warner Ranch Landing Association. The dispute centered on whether the Warner Ranch Landing Association (the Respondent) violated community CC&Rs (Covenants, Conditions, and Restrictions) by increasing annual assessments in 2021. The Petitioner, Thomas W. Sweeney, contended that a 10% assessment increase exceeded the allowable limit defined in the community documents.

The Administrative Law Judge (ALJ) ruled in favor of the Association, dismissing the petition. The ruling established that the Board of Directors acted within its authority under Article 8, Section 8.1.5 of the CC&Rs and complied with Arizona statutory limits (A.R.S. § 33-1803(A)). The decision clarifies the distinction between the "Maximum Annual Assessment"—a calculated ceiling that grows annually—and the actual assessment levied by the Board.

Detailed Analysis of Key Themes

1. Interpretation of Section 8.1.5 (Maximum Annual Assessment)

The core of the dispute was the interpretation of how the "Maximum Annual Assessment" (MAA) is calculated and applied. Under Section 8.1.5, the MAA for 1987 was set at $840.00. For every subsequent year, the MAA increases by the greater of:

  • The percentage increase in the Consumer Price Index (CPI); or
  • Five percent (5%).

The Board is not required to levy the full amount of the MAA each year. However, the document specifies that choosing not to levy the full amount does not prevent the Board from raising assessments to the full MAA in future years. The Respondent demonstrated that if the MAA had increased by 5% annually since 1988, the allowable maximum in 2021 would have been $4,412.81—far exceeding the actual 2021 assessment.

2. Statutory vs. Contractual Limits

The case highlighted the interplay between community-specific CC&Rs and Arizona state law.

  • CC&R Section 8.1.5: Allows for an annual increase in the Maximum assessment ceiling by at least 5%.
  • A.R.S. § 33-1803(A): A state statutory safeguard that prevents Homeowners Associations (HOAs) from imposing a regular assessment more than 20% greater than the previous fiscal year’s assessment.

The Association's 10% increase in 2021 was found to be legally permissible because it was both below the calculated MAA ceiling and well within the 20% statutory limit.

3. Board Discretion and Financial Obligations

The Association provided testimony that the 10% increase was necessary to address inadequately funded reserves for community projects, specifically road improvements. The ALJ noted that Section 8.1.5 explicitly allows the Board to meet increases in utility and insurance obligations without member approval, provided they stay within the statutory 20% limit.

4. Burden of Proof in Administrative Hearings

A significant factor in the dismissal was the Petitioner’s failure to meet the "preponderance of the evidence" standard. The Petitioner offered personal interpretations of the CC&Rs but provided no external evidence or data to support the claim that the Association had exceeded its authority.

Important Quotes with Context

On the Calculation of Assessments

"The Maximum Annual Assessment for any fiscal year shall be equal to the Maximum Annual Assessment for the immediately preceding fiscal year increased at a rate equal to the greater of: (a) the percentage increase… in the Consumer Price Index… or (b) five percent (5%)."

— Context: This excerpt from Section 8.1.5 of the CC&Rs defines the formula used to determine the legal "ceiling" for assessments.

On Board Authority

"Nothing herein shall obligate the Board to levy, in any fiscal year, Annual Assessments in the full amount of the Maximum Annual Assessment… and the election by the Board not to levy… shall not prevent the Board from levying Annual Assessments in subsequent fiscal years in the full amount of the Maximum Annual Assessment."

— Context: This provision protects the Board’s right to increase dues significantly in a single year (up to the MAA) even if they have kept dues low in prior years.

On the Burden of Proof

"Petitioner bears the burden of proof to establish by a preponderance of the evidence that Respondent violated Article 8.1.5 of its CC&Rs… 'A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.'"

— Context: The ALJ explains that the Petitioner must prove the violation is more likely than not; simply disagreeing with the Board's math or interpretation is insufficient.

Actionable Insights

Stakeholder Insight/Action
HOA Boards Maintain Historical MAA Records: Boards should keep a continuous record of the "Maximum Annual Assessment" calculations dating back to the community's inception to justify current increases.
HOA Boards Reserve Funding Transparency: Communicating that increases are tied to specific projects (e.g., road improvements) provides a clear rationale for exercising the right to increase assessments.
Homeowners Distinguish MAA from Actual Levies: Homeowners should understand that the "Maximum Annual Assessment" in many CC&Rs is a theoretical ceiling that grows every year, regardless of whether the actual dues collected grow at the same rate.
Homeowners Evidentiary Requirements: When filing a petition with the Department of Real Estate, petitioners must provide concrete evidence (financial records, professional audits, or data) rather than relying solely on personal interpretations of community documents.
Legal Counsel Statutory Overlays: Always evaluate assessment increases against the 20% statutory cap (A.R.S. § 33-1803(A)), as this often serves as the practical limit even if the CC&Rs allow for a higher "Maximum" ceiling.

Study Guide: Sweeney vs. Warner Ranch Landing Association

This study guide provides a comprehensive overview of the administrative hearing between Thomas W. Sweeney and the Warner Ranch Landing Association (No. 21F-H2120027-REL). It covers the legal frameworks, key arguments, and the interpretation of community documents that shaped the Administrative Law Judge's decision.

I. Core Case Overview

The case centers on a dispute regarding the legality of a 10% increase in annual homeowner association (HOA) assessments for the year 2021. The Petitioner, Thomas W. Sweeney, alleged that the Respondent, Warner Ranch Landing Association, violated Article 8, Section 8.1.5 of the Covenants, Conditions, and Restrictions (CC&Rs) by implementing this increase.

Key Legal Frameworks
  • Article 8, Section 8.1.5 of the CC&Rs: Governs the calculation of the "Maximum Annual Assessment." It establishes a base rate ($840.00 in 1987) and allows for annual increases based on the greater of the Consumer Price Index (CPI) or 5%.
  • A.R.S. § 33-1803(A): An Arizona statute that prohibits an HOA from imposing a regular assessment that is more than 20% greater than the immediately preceding fiscal year's assessment.
  • A.R.S. § 32-2199: Grants the Arizona Department of Real Estate the authority to hear petitions concerning violations of planned community documents.

II. Summary of Arguments

The Petitioner’s Position

Thomas W. Sweeney argued that the Respondent exceeded the allowable assessment increase. His primary points included:

  • Interpretation of 8.1.5: He asserted that the 5% increase mentioned in the CC&Rs only applies if the Consumer Price Index no longer exists.
  • Assessment History: He noted that assessments remained flat at $820.00 semi-annually from 2011 to 2017, increased by 5% in 2018, and reached $925.40 semi-annually in 2020. He contended the 2021 increase should have been limited to a lower amount ($962.70 semi-annually).
  • Motive: He suggested the 10% increase was a response to the membership rejecting a special assessment.
The Respondent’s Position

The Warner Ranch Landing Association argued that the increase was well within both contractual and statutory limits:

  • The "Greater Of" Clause: The Association interpreted Section 8.1.5 as allowing an automatic increase in the "Maximum Annual Assessment" by the greater of the CPI or 5% each year, regardless of whether the Board actually levied that full amount.
  • Cumulative Maximum: Testimony indicated that if the 5% increase had been applied annually since 1988, the 2021 Maximum Annual Assessment would have been $4,412.81.
  • Actual vs. Maximum: The 2021 assessment was set at a level significantly lower than the calculated maximum allowable assessment ($2,324.00 less than the maximum).
  • Statutory Compliance: The 10% increase from the 2020 assessment was lower than the 20% cap mandated by A.R.S. § 33-1803(A).

III. Short-Answer Practice Questions

  1. What was the original Maximum Annual Assessment for each lot in 1987?
  • Answer: Eight Hundred Forty Dollars ($840.00).
  1. According to Section 8.1.5, what two metrics are compared to determine the annual increase of the Maximum Annual Assessment?
  • Answer: The percentage increase in the Consumer Price Index (CPI) and five percent (5%). The Board uses whichever is greater.
  1. Under what specific circumstances can the Board increase the Maximum Annual Assessment without member approval, even if it exceeds the standard rate?
  • Answer: To meet increases in premiums for required insurance coverage or charges for utility services necessary for the Association's performance.
  1. What is the statutory limit for annual assessment increases according to A.R.S. § 33-1803(A)?
  • Answer: The increase cannot be more than 20% greater than the immediately preceding fiscal year's assessment.
  1. Who bears the burden of proof in this administrative hearing, and what is the required evidentiary standard?
  • Answer: The Petitioner bears the burden of proof by a "preponderance of the evidence."
  1. Why did the Association Board decide to raise the 2021 assessment by 10%?
  • Answer: Because the Association's reserves were not adequately funded for planned projects, such as road improvements.

IV. Essay Prompts for Deeper Exploration

  1. The Difference Between "Levied Assessments" and "Maximum Annual Assessments": Analyze the Board's authority to levy assessments at a rate lower than the maximum allowable limit. How does the election not to levy the full maximum in one year affect the Board's ability to levy the full maximum in subsequent years according to Section 8.1.5?
  2. Statutory vs. Contractual Limits: Discuss the interplay between A.R.S. § 33-1803(A) and the community's CC&Rs. If a community's CC&Rs allow for a certain increase, but state law sets a different cap, which takes precedence in the context of this case?
  3. The Role of Judicial Interpretation in CC&R Disputes: The Administrative Law Judge relied on a "plain reading" of Section 8.1.5. Evaluate the Petitioner's interpretation that the 5% increase was a contingency for the disappearance of the CPI versus the Judge's interpretation of the word "or." How do specific grammatical structures influence the outcome of HOA disputes?

V. Glossary of Important Terms

Term Definition
A.R.S. Arizona Revised Statutes; the codified laws of the state of Arizona.
Administrative Law Judge (ALJ) A judge who serves as the trier of fact in hearings conducted by government agencies.
Annual Assessment Regular fees collected from homeowners to fund the operations and maintenance of a planned community.
CC&Rs Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and operations of a common-interest community.
Consumer Price Index (CPI) A measure published by the Bureau of Labor Statistics that examines the weighted average of prices of a basket of consumer goods and services.
Maximum Annual Assessment The theoretical ceiling for regular assessments as calculated by the formula provided in the CC&Rs.
Petition A formal written request to a government authority (in this case, the Department of Real Estate) for a hearing on a specific dispute.
Preponderance of the Evidence The standard of proof in most civil cases, meaning the evidence shows that the claim is "more probably true than not."
Respondent The party against whom a petition is filed (in this case, the Warner Ranch Landing Association).
Special Assessment A one-time fee levied by an HOA for a specific project or emergency, often requiring a membership vote.

Understanding HOA Assessment Limits: Lessons from Sweeney v. Warner Ranch Landing Association

1. Introduction: The Shock of the Assessment Increase

For many homeowners, the arrival of the annual HOA budget is met with a sense of trepidation. When that notice arrives with a significant hike—perhaps 10% or more—the immediate reaction is often one of disbelief. Residents frequently ask: "Can they really do this without a vote?"

The case of Thomas W. Sweeney vs. Warner Ranch Landing Association (No. 21F-H2120027-REL), adjudicated in the Arizona Office of Administrative Hearings, serves as a masterclass in the mechanics of community association finance. In my experience reviewing HOA litigation, these disputes rarely stem from malice, but rather from a fundamental misunderstanding of "Maximum Annual Assessments." This post explores the legal boundaries of board authority and how a decades-old formula can create a surprising "ceiling" for modern dues.

2. The Case Profile: A Dispute Over the Numbers

The conflict began when homeowner Thomas W. Sweeney filed a petition with the Arizona Department of Real Estate. He alleged that his association had overstepped its bounds by imposing a 10% increase for the 2021 fiscal year.

  • Petitioner: Thomas W. Sweeney
  • Respondent: Warner Ranch Landing Association
  • The Document in Question: Article 8, Section 8.1.5 of the community’s Covenants, Conditions, and Restrictions (CC&Rs).
  • The Allegation: The Petitioner asserted that the Association increased annual assessments in violation of the specific mathematical limits established in the CC&Rs.
3. The 1987 Legacy: How a Decades-Old Formula Dictates Today's Dues

To understand why the homeowner lost this case, one must look at the "latent power" hidden in the community’s governing documents. Section 8.1.5 of the Warner Ranch CC&Rs establishes a "Maximum Annual Assessment" (MAA) that began at $840.00 in 1987.

The Compounding Formula Unless two-thirds of the membership votes for a higher amount, the MAA for any given year is the previous year’s maximum increased by the greater of:

  • (a) The percentage increase in the Consumer Price Index (CPI); or
  • (b) Five percent (5%).

The "Math Gap" and Latent Power What many homeowners miss—and what I always emphasize to boards—is that this 5% increase is compounded annually. Because the Association did not levy the full 5% increase every year since 1987, they effectively built a "bank" of authorized but unlevied assessment power.

A critical distinction exists between the Maximum Allowable Assessment (the legal ceiling) and the Actual Assessment (what you pay). The Board is never obligated to levy the full maximum. However, their restraint in past years does not forfeit their right to "catch up" toward that cumulative ceiling in the future.

4. Homeowner’s Misconception vs. The Legal Reality

The Petitioner’s case rested on a restrictive reading of the CC&Rs, whereas the Board relied on the compounding math of the last 30 years.

Homeowner’s Misconception The Board's Legal Reality
Argued the 5% increase only applied if the Consumer Price Index (CPI) ceased to exist. The "plain reading" of the word "or" allows the Board to choose whichever rate is higher (CPI or 5%).
Believed a 10% increase was an illegal overreach because members had previously rejected a special assessment. Provided expert testimony showing that since the CPI rarely exceeded 5% since 1987, the 5% compounding rule was the valid benchmark.
Claimed the 2021 semi-annual assessment should have been capped at $962.70. Demonstrated that the 2021 "ceiling" could have legally reached $4,412.81. The actual 2021 assessment was just $1,898.50—a massive $2,324.00 "cushion" below the maximum.
5. The Statutory Safety Net: Arizona's 20% Rule

While the CC&R formula establishes the internal "ceiling," state law provides an overriding "safety net" that prevents boards from utilizing their latent power too aggressively in a single year.

Under A.R.S. § 33-1803(A), an Arizona HOA is prohibited from imposing a regular assessment that is more than 20% greater than the assessment from the immediately preceding fiscal year. In the Sweeney case, the Community Manager testified that while the CC&R cumulative ceiling was over $4,000, the Board was still bound by this 20% year-over-year statutory cap. Since the Board only implemented a 10% increase to address underfunded reserves for road improvements, they remained well within both the community's internal limits and the state's statutory protections.

6. The Verdict: Why the Judge Dismissed the Petition

Administrative Law Judge Sondra J. Vanella dismissed the petition, ruling that the Association had acted entirely within its authority. The ruling highlighted three key points:

  • The "Plain Reading" Principle: The judge found the language in Section 8.1.5 unambiguous. The word "or" creates a choice, and the Board was entitled to use the 5% compounding method to determine the maximum ceiling.
  • The Insurance/Utility Exception: The judge noted that the Board can even exceed the standard formula (though still remaining subject to the 20% statutory cap) to meet rising costs for insurance premiums and utilities without a member vote.
  • The Burden of Proof: Most importantly, the judge noted the Petitioner offered no evidence or expert data to support his claims, relying solely on his personal interpretation of the text.
7. Key Takeaways for Homeowners and HOA Boards

The Sweeney decision offers several actionable insights for navigating community finances:

  1. Calculate the Cumulative Ceiling: Understand that your "Maximum Assessment" likely grows every year regardless of what you are currently paying. This "latent power" allows boards to implement increases without a vote as long as they stay under that compounded total.
  2. Respect the Statutory Cap: Remember that A.R.S. § 33-1803(A) is your primary protection. Even if a 30-year-old CC&R formula suggests a massive increase is "legal," the 20% annual cap serves as the ultimate check on the Board's year-over-year power.
  3. Establish the Burden of Proof: For homeowners considering a legal challenge, personal disagreement is not evidence. To win an administrative hearing, you must provide data or expert testimony that proves the Board exceeded both the cumulative CC&R ceiling and the statutory cap.
  4. Communicate Reserve Funding Needs: Boards should be transparent about the "why" behind an increase. In this case, the Board justified the hike by citing underfunded reserves for road improvements—a prudent move that usually withstands judicial scrutiny.
8. Final Summary

The tension between maintaining a community’s infrastructure and keeping assessments low is a constant challenge for HOA boards. As Sweeney v. Warner Ranch Landing Association demonstrates, boards often have significantly more "latent" authority to raise dues than homeowners realize. To avoid the expense and stress of administrative hearings, boards should prioritize clear communication about how their "maximum" is calculated, while homeowners should recognize that a 10% increase—while painful—is often a legally sound exercise of the board’s duty to protect the association’s long-term financial health.

Case Participants

Petitioner Side

  • Thomas W. Sweeney (Petitioner)
    Appeared on his own behalf

Respondent Side

  • Austin Baillio (Counsel)
    Warner Ranch Landing Association
    Esq., represented Respondent
  • Christopher Reynolds (Community Manager / Witness)
    Warner Ranch Landing Association
    Provided testimony on behalf of Respondent
  • Michael Goldberg (Vice-president of the Board / Witness)
    Warner Ranch Landing Association
    Provided testimony on behalf of Respondent

Neutral Parties

  • Sondra J. Vanella (Administrative Law Judge)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Haining Xia v. Dorsey Place Condominium Association

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Case Summary

Case ID 21F-H2120016-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-07-14
Administrative Law Judge Sondra J. Vanella
Outcome none
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Haining Xia Counsel —
Respondent Dorsey Place Condominium Association Counsel Nick Nogami, Esq.

Alleged Violations

Bylaws Articles 3.3, 4.1, and 4.4

Outcome Summary

The Administrative Law Judge concluded that Petitioner failed to meet the burden of proof to establish that Respondent violated its Bylaws Articles 3.3, 4.1, and 4.4. The Respondent was found to be the prevailing party, and Petitioner’s appeal was dismissed.

Why this result: Petitioner failed to sustain the burden of proof to establish a violation by a preponderance of the evidence, specifically failing to establish that an election was required during the years alleged.

Key Issues & Findings

Failure to elect the Board at Annual Members Meetings in 2018 and 2019

Petitioner alleged Respondent failed to elect the board during the 2018 and 2019 Annual Members Meetings. The ALJ found that Petitioner failed to sustain the burden of proof to establish a violation, specifically failing to establish that an election was required during those years.

Orders: Respondent is the prevailing party, and Petitioner's appeal is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 41-2198.01
  • A.R.S. § 33-1202(10)

Video Overview

Audio Overview

Decision Documents

21F-H2120016-REL Decision – 895555.pdf

Uploaded 2026-04-24T11:30:48 (107.4 KB)

21F-H2120016-REL Decision – 849881.pdf

Uploaded 2026-04-24T11:30:52 (109.6 KB)

Briefing Document: Xia v. Dorsey Place Condominium Association

Executive Summary

This document synthesizes the key findings, arguments, and legal proceedings from two Administrative Law Judge Decisions concerning a dispute between petitioner Haining Xia and the Dorsey Place Condominium Association (the Respondent). The core of the dispute revolves around Mr. Xia’s allegation that the Association violated its own bylaws by failing to conduct board elections during its 2018 and 2019 annual meetings.

The Respondent’s primary defense was a jurisdictional challenge, arguing that the Office of Administrative Hearings (OAH) could not hear the case because the Association’s condominium status was legally terminated in April 2019, prior to the filing of the petition. This termination was previously upheld by the Maricopa County Superior Court.

In the initial hearing on January 7, 2021, the Administrative Law Judge (ALJ) found that the petitioner failed to meet his burden of proof, relying solely on assertions without presenting any documentary evidence. Consequently, the petition was denied. A rehearing was granted and held on July 2, 2021, where the petitioner submitted documents but failed to provide testimony explaining their relevance or to establish that board elections were required in the years in question. The ALJ again concluded that the petitioner did not sustain his burden of proof. The final order dismissed the petitioner’s appeal and declared the Respondent the prevailing party.

Case Overview

• Case Number: 21F-H2120016-REL / 21F-H2120016-REL-RHG

• Tribunal: Arizona Office of Administrative Hearings (OAH)

• Petitioner: Haining Xia

• Respondent: Dorsey Place Condominium Association

• Presiding Administrative Law Judge: Sondra J. Vanella

• Core Allegation: The petitioner alleged that the Respondent violated its Bylaws Articles 3.3, 4.1, and 4.4 by failing to include board elections on the agendas for the 2018 and 2019 Annual Members Meetings and by never electing a board at said meetings.

Chronology of Proceedings

September 21, 2020

Haining Xia files a Homeowners Association (HOA) Dispute Resolution Petition with the Arizona Department of Real Estate.

November 20, 2020

The Department issues a Notice of Hearing.

January 7, 2021

The initial administrative hearing is held.

January 22, 2021

The ALJ issues a Decision denying the Petitioner’s Petition.

February 18, 2021

The Petitioner files a request for rehearing, citing errors of law and evidence.

March 23, 2021

The Commissioner of the Arizona Department of Real Estate issues an Order Granting Rehearing.

July 2, 2021

The rehearing is conducted.

July 14, 2021

The ALJ issues the final Decision, declaring the Respondent the prevailing party and dismissing the Petitioner’s appeal.

Petitioner’s Position and Arguments

Haining Xia’s case rested on several key arguments presented across both hearings.

• Primary Claim: The central assertion was that the Respondent was in “direct violation of HOA Bylaws Article 3.3, Article 4.1 and Article 4.4” because board elections were not held or even placed on the agenda for the 2018 and 2019 annual meetings.

• Challenge to Condominium Termination: Mr. Xia actively disputed the validity of the Association’s termination as a condominium.

◦ He argued the “Condominium Termination Agreement” was invalid because it “does not contain valid signatures” and represented a “usurpation of corporate power.”

◦ He maintained that because he still holds the title to his unit and the sale has not been finalized, the condominium status could not be legally changed.

◦ He stated his intention to appeal a separate Maricopa County Superior Court ruling which had already upheld the termination agreement.

• Specific Meeting Grievances:

◦ 2018 Meeting: The annual meeting, scheduled for March, was delayed until August 2018. Its stated purpose was to vote on a special assessment, but Mr. Xia asserted there was “not a valid board for that meeting.”

◦ 2019 Meeting: This meeting was held to discuss the termination agreement, but Mr. Xia claimed there was “no election of board members or appointment of officers.”

• Stated Objective: The petitioner requested “a definitive answer as to whether there were valid corporate officers” and, in the rehearing, stated he “wants a finding that there was no legitimate board and no officers appointed.”

• Personal Motivation: During the rehearing, Mr. Xia asserted that he is the only homeowner “who stood up to fight,” that he is fighting “evil,” and is “looking for justice.”

Respondent’s Position and Arguments

The Dorsey Place Condominium Association’s defense was primarily procedural and jurisdictional.

• Jurisdictional Challenge: The Respondent filed a Motion to Dismiss, arguing that the OAH lacked jurisdiction over the dispute.

◦ The basis for this argument was that the Association’s status as a “Condominium” was terminated via a “Condominium Termination Agreement” recorded on April 9, 2019.

◦ As the entity no longer met the legal definition of a condominium under A.R.S. §33-1202(10), the OAH had no authority to hear a dispute between it and a unit owner.

• Superior Court Precedent: The Respondent emphasized that the validity of the termination agreement had already been adjudicated and upheld by the Maricopa County Superior Court. The ALJ noted that the OAH “does not have the authority to overturn or modify that ruling.”

• Mootness: The Respondent argued that since the termination, the property is “currently being utilized as an apartment complex,” making the petitioner’s claims moot.

Administrative Law Judge’s Findings and Conclusions

The decisions issued by ALJ Sondra J. Vanella focused squarely on the legal standard of proof required of the petitioner.

The ALJ repeatedly established that the petitioner “bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence.” This standard is defined as “proof as convinces the trier of fact that the contention is more probably true than not.”

• Failure to Present Evidence: The ALJ found that Mr. Xia “failed to present any evidence at hearing, documentary or otherwise, but rather relied solely on his own assertions.”

• Conclusion: The petitioner did not meet his burden of proof to establish a violation of the specified bylaws.

• Order: The Petition was denied.

• Basis for Rehearing: The rehearing was granted based on the petitioner’s claim of “error in the admission or rejection of evidence or other errors of law occurring during the proceeding.”

• Evidence at Rehearing: Mr. Xia submitted several documents, including meeting notices for 2018 and 2019, an “Action by Written Consent,” and a “Board Resolution Filling Director and Officer Vacancies.” However, he “did not provide an explanation of the documents at hearing or testimony concerning the documents.”

• Final Conclusion: After reviewing all evidence from both hearings, the ALJ concluded that the petitioner “failed to sustain his burden to establish a violation.” Critically, the ALJ noted that Mr. Xia “failed to establish that an election was required during either of those years [2018 and 2019].”

• Final Order: The Respondent was declared the prevailing party, and the petitioner’s appeal was dismissed. This order is binding unless appealed to the superior court within 35 days.

Relevant Bylaw Articles

The petition was based on alleged violations of the following articles from the Dorsey Place Condominium Association Bylaws:

Article

Key Provision

Annual Members Meeting

States that at each annual meeting, “the Members shall elect the Board and transact such other business as may properly be brought before the meeting.”

Election

Stipulates that the Association’s affairs are managed by the Board and that “each director shall be elected at the annual meeting of Members concurrent with the expiration of the term of the director he or she is to succeed.”

Annual Board Meetings

Requires that “within thirty (30) days after each annual meeting of Members, the newly elected directors shall meet forthwith for the purpose of organization, the election of officers, and the transaction of other business.”

Study Guide: Haining Xia v. Dorsey Place Condominium Association

This guide reviews the administrative case between Haining Xia (Petitioner) and the Dorsey Place Condominium Association (Respondent) before the Arizona Office of Administrative Hearings. It covers the core allegations, legal arguments, procedural history, and final rulings.

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 sentences based on the information provided in the case documents.

1. Who are the primary parties in this case and what are their roles?

2. What specific violations of the association’s Bylaws did the Petitioner allege?

3. What was the Respondent’s primary legal argument for why the Office of Administrative Hearings lacked jurisdiction?

4. According to the case documents, what is the legal standard known as “preponderance of the evidence”?

5. What was the initial ruling by the Administrative Law Judge on January 22, 2021, and what was the key reason for this decision?

6. On what grounds did the Petitioner request and receive a rehearing of the case?

7. What evidence did the Petitioner submit during the rehearing on July 2, 2021?

8. Why did the Administrative Law Judge state that the Office of Administrative Hearings could not invalidate the “Condominium Termination Agreement”?

9. What specific requirements for annual meetings are outlined in Article 3.3 of the Respondent’s Bylaws?

10. What was the final outcome of the case after the rehearing, as detailed in the order dated July 14, 2021?

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Answer Key

1. The primary parties are Haining Xia, the Petitioner, and Dorsey Place Condominium Association, the Respondent. The Petitioner is the unit owner who filed a dispute petition, while the Respondent is the homeowners’ association accused of violating its own Bylaws.

2. The Petitioner alleged that the Respondent violated Bylaws Articles 3.3, 4.1, and 4.4. He claimed the Respondent never elected a board at its Annual Members Meetings for 2018 and 2019 and that board elections were not included on the agendas for those meetings.

3. The Respondent argued that the Office of Administrative Hearings lacked jurisdiction because the association’s condominium status was terminated in April 2019 via a “Condominium Termination Agreement.” As it was no longer legally a condominium, the Respondent claimed it did not meet the statutory requirements for OAH jurisdiction over such disputes.

4. The legal standard is defined as “such proof as convinces the trier of fact that the contention is more probably true than not.” It is also described as “The greater weight of the evidence… sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

5. The initial ruling on January 22, 2021, denied the Petitioner’s Petition. The judge concluded that the Petitioner failed to meet his burden of proof because he presented no documentary evidence and relied solely on his own assertions to support his claims.

6. The Petitioner requested a rehearing on the grounds that there was an “error in the admission or rejection of evidence or other errors of law occurring during the proceeding.” The Commissioner of the Arizona Department of Real Estate granted this request.

7. During the rehearing, the Petitioner submitted Annual Membership Meeting Notices for 2018 and 2019, a document titled “Action by Written Consent of a Majority of the Unit Owners,” and a November 16, 2018, Board Resolution. However, he did not provide testimony or an explanation concerning these documents.

8. The Administrative Law Judge advised the Petitioner that the validity of the termination agreement had already been adjudicated and upheld by the Maricopa County Superior Court. The Office of Administrative Hearings does not have the legal authority to overturn or modify a ruling from the Superior Court.

9. Article 3.3 states that the annual meeting of Members shall be held in March each year, though it can be delayed until May 31. The purpose of this meeting is for the Members to elect the Board and transact other business that may properly be brought before the meeting.

10. After the rehearing, the Administrative Law Judge again ruled against the Petitioner, ordering that his appeal be dismissed and naming the Respondent as the prevailing party. The judge concluded that the Petitioner once again failed to sustain his burden to establish a violation of the Bylaws.

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Essay Questions

Instructions: The following questions are designed for a more in-depth, essay-style response. Answers are not provided.

1. Analyze the jurisdictional challenge raised by the Respondent. How did the “Condominium Termination Agreement” of April 2019 fundamentally alter the legal status of the property and impact the proceedings before the Office of Administrative Hearings?

2. Discuss the legal standard of “preponderance of the evidence” as it is defined and applied in this case. Explain in detail why the Administrative Law Judge concluded that the Petitioner failed to meet this burden of proof in both the initial hearing and the subsequent rehearing.

3. Trace the complete procedural history of this case, beginning with the filing of the petition on September 21, 2020, and ending with the final order on July 14, 2021. Identify the key events, decisions, and legal reasonings at each stage.

4. Evaluate the different arguments made by the Petitioner, including his claims about invalid board elections, the legitimacy of the termination agreement, and his status as a titled owner. Explain why the Office of Administrative Hearings was limited in its authority to rule on certain aspects of his claims.

5. Based on Bylaws Articles 3.3, 4.1, and 4.4, describe the prescribed process for electing the Board of Directors and conducting annual meetings. How did the Petitioner’s specific allegations in his petition directly challenge whether the Respondent had followed these procedures?

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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. In this case, the ALJ was Sondra J. Vanella.

Affirmative Defense

A set of facts other than those alleged by the petitioner which, if proven by the respondent, defeats or mitigates the legal consequences of the respondent’s otherwise unlawful conduct. The respondent bears the burden of proof for affirmative defenses.

A.R.S.

Abbreviation for Arizona Revised Statutes, the collection of laws for the state of Arizona.

Bylaws

The set of rules governing the internal management and affairs of an organization, such as a homeowners’ association. The Petitioner alleged violations of Articles 3.3, 4.1, and 4.4 of the Respondent’s Bylaws.

Condominium Termination Agreement

A legal document recorded on April 9, 2019, that officially terminated the condominium status of Dorsey Place. The Respondent argued this action removed it from the jurisdiction of the Office of Administrative Hearings for condominium disputes.

Department

Refers to the Arizona Department of Real Estate, the state agency authorized to receive and decide petitions for hearings involving homeowners’ associations.

Homeowners Association (HOA)

An organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties and residents. The Dorsey Place Condominium Association is the HOA in this case.

Jurisdiction

The official power to make legal decisions and judgments. The Respondent challenged the OAH’s jurisdiction on the basis that it was no longer legally a condominium.

Motion to Dismiss

A formal request made by a party to a court or other tribunal to dismiss a case. The Respondent filed a Motion to Dismiss for lack of jurisdiction.

Office of Administrative Hearings (OAH)

A state agency that conducts hearings for other state agencies. In this case, the OAH conducted the hearing for the Arizona Department of Real Estate.

Petition

The formal written request filed by the Petitioner to initiate the dispute resolution process with the Arizona Department of Real Estate.

Petitioner

The party who files a petition or brings an action in a legal proceeding. In this case, the Petitioner is Haining Xia.

Preponderance of the Evidence

The burden of proof in this civil case. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not,” and as evidence that has “the most convincing force.”

Respondent

The party against whom a petition is filed or an action is brought. In this case, the Respondent is the Dorsey Place Condominium Association.

Superior Court

A state trial court of general jurisdiction. The Maricopa County Superior Court had previously issued a ruling upholding the validity of the Condominium Termination Agreement.

He Fought His HOA and Lost—Twice. 3 Costly Mistakes Every Homeowner Should Avoid.

The Frustration and the Fight

For many homeowners, dealing with a Homeowners Association (HOA) can be a source of immense frustration. Rules can feel arbitrary, and board decisions can seem opaque. It’s a common feeling to believe the HOA is in the wrong and to want to stand up for your rights. But what happens when that conviction meets the cold, hard reality of the legal system?

The case of Haining Xia versus the Dorsey Place Condominium Association serves as a powerful cautionary tale for any homeowner considering a legal challenge. Mr. Xia’s core complaint was straightforward and, on its face, seemed reasonable: he alleged that his HOA violated its own bylaws by failing to hold board elections during its 2018 and 2019 annual meetings.

Despite his strong convictions, he lost his case. He was then granted a rehearing—a rare second chance—and lost again. This article explores the surprising and crucial lessons from his defeat, revealing why simply being right in principle is often not enough to win in practice.

1. Conviction Is Not Evidence

The single biggest reason for Mr. Xia’s failure was his inability to provide proof for his claims. In the initial hearing, the Administrative Law Judge’s decision was stark: the petitioner “failed to present any evidence at hearing, documentary or otherwise, but rather relied solely on his own assertions.”

Herein lies the central mistake for any potential litigant: in a legal proceeding, the outcome isn’t determined by who feels most wronged, but by who can meet the required standard of proof. In this case, that standard was the “preponderance of the evidence.” The legal definition clarifies this standard:

“The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Think of it as the scales of justice. Your evidence doesn’t need to slam one side to the ground, but it must be strong enough to tip the scale, even slightly, in your favor. Mr. Xia arrived with only his convictions, which carry no weight on the scale.

During the rehearing, his testimony was filled with passionate statements, asserting that he was the only homeowner “who stood up to fight,” that he was fighting “evil,” and was simply “looking for justice.” These heartfelt convictions, however, were met with the judge’s blunt conclusion that he failed to meet his evidentiary burden. This reveals a critical lesson: in a legal setting, the passion of one’s convictions is irrelevant without factual, documentary proof to back them up.

2. Fight the Right Battle in the Right Courtroom

A significant portion of Mr. Xia’s case was derailed by a fundamental strategic error. The HOA’s attorney argued that the Office of Administrative Hearings (OAH)—the body hearing the dispute—had no power over the case because the property had ceased to be a condominium in 2019 pursuant to a “Condominium Termination Agreement.”

In response, Mr. Xia tried to argue that this termination agreement was invalid, claiming it “does not contain valid signatures” and was a “usurpation of corporate power.” This was the wrong argument to make in the wrong place.

The Administrative Law Judge explicitly advised him that the validity of the termination agreement had already been decided by a higher court, the Maricopa County Superior Court. The judge stated plainly that the OAH “does not have the authority to overturn or modify that ruling.”

This wasn’t just a procedural mistake; it was a credibility-damaging tactical blunder. By focusing on an issue the court had no power to address, he appeared unprepared and distracted from the one claim he was actually there to prove. This strategic error likely damaged his credibility with the judge from the outset, underscoring the importance of understanding a court’s specific jurisdiction before you ever step foot inside.

3. A Second Chance Requires a New Strategy, Not Just New Documents

Being granted a rehearing is a significant opportunity in any legal dispute. Mr. Xia was granted this second chance after citing a specific “error in the admission or rejection of evidence or other errors of law occurring during the proceeding.” This wasn’t a general appeal to fairness; it was a procedural opening that offered a rare chance to correct the flaws of his first attempt.

Unfortunately, he failed to capitalize on it. While he did submit documents in the second hearing, the judge noted a fatal flaw in his presentation: he “did not provide an explanation of the documents at hearing or testimony concerning the documents.”

Submitting a stack of papers is not the same as building a case. Evidence doesn’t speak for itself. Each document needed a narrative. Mr. Xia should have walked the judge through each paper, explaining: “This is the notice for the 2018 meeting. As you can see, an election is not on the agenda, which violates Bylaw 3.3. This document proves my specific claim.” Without that narrative, he just presented a puzzle with no solution.

The final, unambiguous conclusion from the second hearing was that the “Petitioner failed to establish that an election was required during either of those years.” The key takeaway is clear: a procedural victory like a rehearing is meaningless if the fundamental flaws in your case—in this instance, a lack of compelling, well-explained evidence—are not corrected.

From Principle to Proof

Mr. Xia’s journey shows a fatal progression: he began with a case built on feeling instead of fact, tried to fight it in the wrong court over a settled issue, and when given a rare chance to fix these fundamental errors, he failed to change his approach. It’s a story of how a lack of preparation can doom a case from start to finish.

This case is a stark reminder that in the eyes of the law, a right that cannot be proven does not exist. Before you begin your fight, ask yourself: are you prepared to prove your case, not just believe in it?

Case Participants

Petitioner Side

  • Haining Xia (petitioner)
    Appeared and testified on his own behalf

Respondent Side

  • Nick Nogami (attorney)
    Dorsey Place Condominium Association
    Represented Respondent
  • Edith Rudder (attorney)
    Carpenter, Hazlewood, Delgado & Bolen, PLC
    Listed on service list

Neutral Parties

  • Sondra J. Vanella (ALJ)
    OAH
    Administrative Law Judge for initial hearing and rehearing
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
    Commissioner who issued Order Granting Rehearing
  • Daniel Martin (judge)
    Referenced regarding a prior Minute Entry