Tag Archives: 2026

Yin Macatabas

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Case Summary

Case ID 25F-H089-REL
Agency Arizona Department of Real Estate
Tribunal Arizona Office of Administrative Hearings
Decision Date 2026-04-27
Administrative Law Judge NR
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Yin Macatabas Counsel Pro Se
Respondent Tapestry on Central Condominium Association Counsel Monya Cohen, Allison Preston

Alleged Violations

No violations listed

Video Overview

Audio Overview

Briefing: Macatabas v. Tapestry on Central Condominium Association

Executive Summary

The case of Yin Macatabas v. Tapestry on Central Condominium Association (No. 25F-H089-REL) centers on a dispute over access to association records following a $3.5 million special assessment. The Petitioner, Yin Macatabas, alleged that the Association violated Arizona Revised Statute (A.R.S.) § 33-1258 by failing to provide requested documents—including competitive bids for elevators, lobbies, and HVAC projects—within the mandatory ten-business-day window.

Following evidentiary hearings held on April 2 and April 7, 2026, Administrative Law Judge (ALJ) Nicole Robinson ruled in favor of the Respondent. The decision concluded that the Association had fulfilled its statutory obligations by making the records "reasonably available" through an online owner portal and via physical hand-delivery to the Petitioner's doorstep. Crucially, the tribunal found that certain records requested by the Petitioner, such as lobby and HVAC bids, did not exist at the time of the request and therefore could not be produced. The petition was denied in its entirety on April 27, 2026.

Case Overview and Procedural History

Case Information
Category Details
Case Number 25F-H089-REL
Petitioner Yin Macatabas (Unit A123)
Respondent Tapestry on Central Condominium Association
Management First Service Residential
Governing Statute A.R.S. § 33-1258 (Records Disclosure)
Presiding Judge Nicole Robinson (Administrative Law Judge)
Timeline of Events
  • Summer 2023: Petitioner purchases unit A123 at Tapestry on Central.
  • January – July 2025: The Association holds bi-monthly board meetings and town halls to discuss a $3.5 million special assessment necessitated by depleted reserves and critical infrastructure needs.
  • July 30, 2025: Petitioner submits a formal records request for CC&Rs, bylaws, and all contractor bids/proposals supporting the assessment. A special assessment meeting is held the same evening.
  • August 8, 2025: Association staff prepares a physical packet. After the Petitioner fails to pick it up, the General Manager hand-delivers it to the Petitioner’s unit.
  • September 3, 2025: Petitioner files a formal petition with the Arizona Department of Real Estate (ADRE).
  • April 2 & 7, 2026: Evidentiary hearings conducted via Google Meet and in-person.
  • April 27, 2026: Final Administrative Law Judge Decision issued, denying the petition.

Detailed Analysis of Key Themes

1. The Definition of "Reasonably Available"

The central legal tension was whether the Association was required to ensure the Petitioner received the documents or merely made them available. Under A.R.S. § 33-1258, records must be "reasonably available for examination."

  • The Portal: The Association argued that uploading documents to the homeowner portal constituted availability. Witness testimony established that elevator bids were on the portal, though the Petitioner claimed she could not find them.
  • Physical Delivery: The Association went beyond the statute's requirements by preparing a physical packet and hand-delivering it to the Petitioner's unit on August 8, 2025, when she failed to pick it up.
2. The Scope and Existence of Records

A significant portion of the dispute involved the Petitioner’s request for documents that did not yet exist.

  • The Elevator Bids: Two bids for $477,000 each existed for the elevators and were provided.
  • Non-Existent Records: Board President Candess Hunter testified that because the Association was in the "design phase" for the lobby and hallway projects, no formal competitive bids had been obtained or approved by the board at the time of the July request.
  • HVAC: The HVAC amount in the assessment was based on a reserve study, not a specific contractor bid. The ALJ ruled that the Association cannot be held in violation for failing to produce records that are not in its possession.
3. Financial Instability as Context for Assessment

Testimony from the Board President highlighted the dire financial situation that led to the $3.5 million assessment:

  • The Association's reserves had been depleted to approximately $250,000 against a projected $4.5 million in needs.
  • A "catastrophe" with the fire system cost over $1 million.
  • Insurance providers were threatening cancellation due to the poor condition of the elevators, which would have forced the board to resign and placed the community into receivership.
4. Credibility and Burden of Proof

The Petitioner bore the burden of proving the violation by a "preponderance of the evidence." The ALJ found the Association’s witnesses (the General Manager and Board President) to be credible. Their testimony regarding the preparation and delivery of the documents on August 8, 2025, outweighed the Petitioner’s claim of non-receipt. The Petitioner’s lack of participation in the seven months of preparatory town halls and meetings prior to the vote was also noted as a factor in her misunderstanding of which bids actually existed.

Important Quotes and Context

Regarding the Delivery of Documents

"I did that because um it was going to be a weekend. We were coming up on a deadline. I I felt like it was a courtesy. I felt it would be faster and I went to the door and I delivered the documents." — Kara Tretbar, Former General Manager, explaining the August 8, 2025, delivery to the Petitioner’s condo.

Regarding the Financial State of the Association

"Our reserves were down to almost nothing. We had had a huge catastrophe with our fire system and that it cost depleted our reserves… We were on the brink of receivership." — Candess Hunter, Board President, providing context on why the $3.5 million special assessment was critical.

Regarding the Existence of Requested Bids

"To think that we could possibly even have bids for the C lobby and the A hallways when we didn't have a design for them yet, I it just was beyond me to think that it was possible for anybody to be that confused." — Candess Hunter, Board President, addressing the Petitioner’s request for lobby and hallway bids.

Regarding the Legal Standard

"Description is not proof… Respondent did not establish that the requested records were made available to me in the way they claim." — Yin Macatabas, Petitioner, in her closing argument, emphasizing the lack of an "audit trail" or photo evidence of delivery.

The Tribunal’s Conclusion

"In this case, the credible weight of the evidence established that Respondent made the requested documents reasonably available to Petitioner for examination. Petitioner had access to the owner portal whereby all of the requested documents resided." — Nicole Robinson, Administrative Law Judge, in the Final Decision.

Actionable Insights

For Homeowners’ Associations (HOAs)
  • Utilize Portals for Compliance: Maintaining a robust, searchable online portal for CC&Rs, meeting minutes, and bids is a primary defense against claims of withholding records.
  • Document Pick-ups and Deliveries: While not strictly required by statute, keeping a delivery log or obtaining a signature when providing physical records can prevent "he-said, she-said" disputes in administrative hearings.
  • Clarify Record Non-Existence: When a member requests records that do not exist (e.g., bids for a project still in the design phase), the Association should explicitly state in writing that no such records currently exist.
For Association Members
  • Engage Early: The ALJ noted the Petitioner did not attend town halls where the project details were discussed. Early participation can clarify the timeline for when bids and contracts are actually generated.
  • Request Portal Assistance: If unable to find documents on a portal, members should formally request assistance or a direct link to the specific folder to demonstrate a good-faith effort to access "reasonably available" records.
  • Understand the "Reasonably Available" Standard: Arizona law does not require associations to ensure a member "received" a record, only that the member was given a reasonable opportunity to examine or purchase it.

Contact Information for Related Parties

Entity Role Contact Info
Arizona Dept. of Real Estate Commissioner [email protected]
Carpenter Hazlewood Delgado & Bolen Respondent Counsel [email protected]
Yin Macatabas Petitioner [email protected]
First Service Residential Management [email protected]

Study Guide: Yin Macatabas v. Tapestry on Central Condominium Association

This study guide provides a comprehensive overview of the administrative hearing case Yin Macatabas v. Tapestry on Central Condominium Association (Case No. 25F-H089-REL). It covers the legal framework, the core dispute regarding records access, and the final judicial determination.

Case Overview and Core Themes

The case centers on a dispute between a condominium owner (Petitioner) and her homeowner association (Respondent) regarding the transparency of a $3.5 million special assessment. The primary legal question was whether the Association violated state law by failing to provide requested records within the statutory timeframe.

Key Legal Framework: A.R.S. § 33-1258

The governing authority in this matter is Arizona Revised Statute § 33-1258, which outlines the requirements for condominium associations regarding record keeping and member access:

  • Availability: All financial and other records must be made "reasonably available" for examination by a member or their representative.
  • Timeframe: The association has ten business days to fulfill a request for examination or to provide copies of requested records.
  • Fees: While associations cannot charge for the review of records, they may charge up to fifteen cents per page for physical copies.
  • Exceptions: Certain records may be withheld, such as privileged attorney-client communications, pending litigation, or personal/financial records of specific members or employees.
The Dispute Timeline (2025–2026)
  • July 30, 2025: Petitioner submits a formal records request for documents supporting a $3.5 million special assessment.
  • August 13, 2025: The statutory 10-business-day deadline for providing the records.
  • September 3, 2025: Petitioner files a petition with the Arizona Department of Real Estate (ADRE) alleging a violation.
  • April 2 & April 7, 2026: Evidentiary hearings are conducted by the Office of Administrative Hearings (OAH).
  • April 27, 2026: Administrative Law Judge (ALJ) Nicole Robinson issues the final decision.

Short-Answer Practice Questions

1. What specific documents did the Petitioner request on July 30, 2025? The Petitioner requested the full CC&Rs and Bylaws, the special assessment justification packet, all contractor bids/proposals for elevator, lobby, hallway, and HVAC projects, detailed financial breakdowns for the $3.5 million assessment, and relevant meeting minutes/voting records.

2. What was the Association’s primary defense regarding the availability of records? The Association argued that the records were "reasonably available" through an online owner portal and that a physical packet of documents was hand-delivered to the Petitioner's unit on August 8, 2025.

3. Why were HVAC and lobby bids not provided to the Petitioner? The Association testified that at the time of the request, these bids did not exist. The Board was still in the process of gathering information or determining designs, and therefore no "association records" for these specific projects had been created yet.

4. What is the "Burden of Proof" in this administrative hearing, and who holds it? The Petitioner holds the burden of proof. She was required to prove by a "preponderance of the evidence" (that the claim is more probable than not) that the Association violated A.R.S. § 33-1258.

5. How did the Administrative Law Judge rule on the hand-delivery of documents? The ALJ found the testimony of the Association’s witnesses credible. Even though the Petitioner claimed she never received the packet, the judge determined the Association fulfilled its duty by making the records available on the portal and attempting hand-delivery.

Essay Prompts for Deeper Exploration

1. Defining "Reasonable Availability" in the Digital Age Analyze the Association’s use of an online owner portal to satisfy A.R.S. § 33-1258. Does the existence of a digital repository satisfy the legal requirement for records to be "reasonably available," even if a member experiences technical difficulties or claims they were not properly instructed on how to navigate the system? Use the testimony of Candess Hunter and Kara Tretbar to support your argument.

2. The Conflict Between Petitioner Testimony and Corporate Records The Petitioner argued that Respondent failed to provide an "audit trail" or physical proof (such as a delivery log or photograph) of the August 8th document delivery. Contrast this with the ALJ’s conclusion that "testimony is evidence." Discuss the weight given to witness credibility versus physical documentation in administrative hearings.

3. Statutory Compliance and Non-Existent Records The Petitioner requested bids for several projects that the Association claimed were not yet finalized or bid out. Explore the legal obligations of an HOA when a member requests documents that do not yet exist. Does a "status update" or "reserve study" suffice when specific competitive bids have not been obtained?

Glossary of Important Terms

Term Definition
A.R.S. § 33-1258 The Arizona statute governing the disclosure and availability of condominium association records to its members.
Administrative Law Judge (ALJ) A judicial officer who presides over administrative hearings, such as those conducted by the Office of Administrative Hearings (OAH).
Burden of Proof The obligation of a party (in this case, the Petitioner) to provide enough evidence to support their claim.
CC&Rs Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and operations of the community.
Owner Portal An online digital platform provided by the Association where members can access documents, pay dues, and view community information.
Preponderance of the Evidence The standard of proof used in civil and administrative cases, meaning the evidence shows the fact is more likely true than not.
Reserve Study A financial document used by HOAs to plan for long-term maintenance and replacement of common area components (e.g., HVAC units).
Special Assessment A one-time fee levied on homeowners by an association to fund specific projects or financial shortfalls not covered by regular dues.
Tribunal A body established to settle a certain type of dispute; in this context, the Office of Administrative Hearings.

The $3.5 Million Question: Lessons in Transparency from the Macatabas v. Tapestry Case

1. Introduction: The High Stakes of HOA Assessments

In the summer of 2025, the homeowners of Tapestry on Central—a 292-unit complex in Midtown Phoenix—found themselves standing at a financial precipice. The Association was on the brink of receivership, reeling from a "fire system catastrophe" that had gutted its reserves. With nearly $4.5 million in looming expenses and only $250,000 in the bank, the Board proposed a staggering $3.5 million special assessment to stabilize the community's future.

For residents, a levy of this magnitude is not merely a line item; it is a significant personal financial blow. In such high-stakes environments, the "right to know" becomes the primary battleground. At the heart of Macatabas v. Tapestry on Central Condominium Association was a fundamental question of transparency: Did the Association violate state law by failing to provide the documentation justifying this massive levy? This case serves as a masterclass in the legal nuances of records disclosure and the practical limits of an HOA’s duty to produce information.

2. The Paper Trail: What Was Requested and Why

On July 30, 2025, Petitioner Yin Macatabas submitted a formal records request following a contentious meeting regarding the assessment. Seeking to verify the "evidence" behind the $3.5 million figure, she requested five specific categories of documents:

  • Governing Documents: Full CC&Rs and Bylaws.
  • Special Assessment Justification Packet: The information sent to owners explaining the necessity of the levy.
  • Competitive Bids: Specific vendor proposals for elevators, lobbies, hallways, and HVAC systems.
  • Financial Breakdowns: The data used to calculate the $3.5 million total, specifically distinguishing between "ballparked" provisional estimates based on preliminary reserve studies and actual fixed contracts.
  • Board Records: Meeting minutes and voting records related to the assessment’s approval.

3. The "Reasonable Availability" Debate

When the dispute reached the Arizona Office of Administrative Hearings in April 2026, the testimony revealed a classic "he-said/she-said" scenario, further complicated by internal contradictions within the Association’s own management.

Points of Contention
Point of Contention Petitioner’s Claims Respondent’s Testimony
Document Delivery Macatabas (Unit A123) testified she never received a physical packet, email, or portal upload of the bids. GM Kara Tretbar testified she hand-delivered a packet to the door of Unit A123 in the "A Building" at 4:30 PM on August 8, 2025—five days before the legal deadline.
Conflicting Accounts Petitioner highlighted that Tretbar initially testified bids existed by Aug 8, only for the Board President to "correct" her later. Board President Candess Hunter clarified Tretbar "misspoke"; lobby and HVAC bids did not exist yet as projects were only in the design phase.
Audit & Verification Petitioner argued there was no photo, receipt, or "audit trail" to prove the delivery occurred. President Hunter retorted: "We’re an HOA; we’re not the police department." The Association argued the law requires "reasonable availability," not a forensic chain of custody.
Portal Access Macatabas claimed she checked the portal and found it empty of the requested bids. The Association maintained all existing records, including the $477k elevator bids, were uploaded and available to any owner who looked.

4. Legal Deep Dive: Understanding ARS § 33-1258

The pivot point of this case is ARS § 33-1258, which mandates that association records be made "reasonably available" within 10 business days.

In this instance, Macatabas calculated her deadline as August 13. The Association’s attempted delivery on August 8 was well within that window. However, the more complex legal issue involved the requested HVAC and lobby bids. The Petitioner demanded these records to justify the $3.5 million total, but the Board revealed those figures were "ballparked" from reserve studies—actual vendor bids had not yet been solicited or received.

As a Senior Analyst, I must be clear: The Law does not require the production of ghosts; if a document has not been drafted, it cannot be "reasonably available" for inspection. Administrative Law Judge Nicole Robinson affirmed that provisional estimates or "ballpark" figures used for planning are not corporate records subject to production until a formal, written bid is actually received by the Association.

5. The Verdict: Why the Judge Denied the Petition

On April 27, 2026, Judge Robinson rendered her decision in favor of the Association. The ruling focused on the "Reasonably Available" standard rather than the disputed physical delivery.

The Judge found that the Association met its burden by maintaining the documents on the online owner portal. Even though the hand-delivery to the "A Building" was contested, the portal provided a "secondary layer of compliance" that satisfied the statute. Because the records were accessible digitally, the Association was not in violation of the 10-day rule. Consequently, the petition was denied, and the Association was not required to reimburse the Petitioner’s filing fee.

6. Essential Takeaways for Homeowners and HOA Boards

The Macatabas case provides a roadmap for navigating transparency in a digital age:

  1. Digital Portals as the Gold Standard: For HOA Boards, a well-maintained owner portal is your best legal shield. If a document is uploaded, it is generally considered "reasonably available," mooting disputes over lost mail or unrecorded hand-deliveries.
  2. The Limits of Disclosure: Boards are not required to produce documents that don't exist. Preliminary figures from a reserve study are planning tools, not "corporate records." Until a vendor puts pen to paper, there is no "bid" to disclose.
  3. The "Reasonably Available" Two-Way Street: This standard implies a duty of inquiry for the homeowner. While the Board must provide access, the owner has a responsibility to check the provided resources (like the portal) before alleging a statutory violation.
  4. Communication is Key: The friction in the "A Building" might have been avoided if the Association had sent a simple follow-up email confirming the August 8 delivery. Clear instructions on exactly where to find documents on the portal can prevent costly litigation.

7. Conclusion: The Path Forward

The $3.5 million question at Tapestry on Central highlights the inevitable tension between a Board’s emergency duty to save a community from receivership and a homeowner's right to verify the costs. This case sets a clear precedent: while associations must be transparent, "reasonable availability" is a functional standard, not a requirement for obsessive bookkeeping. When both sides embrace proactive communication over a "police department" mentality, the spirit of the community can survive even the most catastrophic financial challenges.

Case Participants

Petitioner Side

  • Yin Macatabas (Petitioner)
    Tapestry on Central Condominium Association
    Condominium owner

Respondent Side

  • Monya Cohen (Attorney)
    Carpenter Hazlewood Delgado & Bolen LLP
    Counsel for Respondent
  • Allison Preston (Attorney)
    Carpenter Hazlewood Delgado & Bolen LLP
    Co-counsel for Respondent
  • Kara Tretbar (Witness)
    First Service Residential
    Former General Manager at Tapestry on Central
  • Candess Hunter (Witness)
    Tapestry on Central Condominium Association
    President of the Association's Board of Directors

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
    Issued preliminary continuances and orders
  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over the hearings and issued the final decision
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Ann Galpin v. University Shadows Homeowners Association, Inc.

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Case Summary

Case ID 25F-H099-REL
Agency —
Tribunal Office of Administrative Hearings, Arizona
Decision Date 2026-04-15
Administrative Law Judge NR
Outcome Petition Denied
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Ann Galpin Counsel Pro Se
Respondent University Shadows Homeowners Association, Inc. Counsel Mark Lines, Shaw & Lines, LLC

Alleged Violations

No violations listed

Video Overview

Audio Overview

Briefing Document: Galpin v. University Shadows Homeowners Association, Inc.

Executive Summary

This briefing document summarizes the administrative proceedings and final decision in the matter of Ann Galpin v. University Shadows Homeowners Association, Inc. (No. 25F-H099-REL). The case centered on a dispute regarding a homeowner's right to access specific financial records under Arizona Revised Statutes (A.R.S.) § 33-1258.

The Petitioner, Ann Galpin, alleged that the University Shadows Homeowners Association (the Association) failed to comply with her October 14, 2025, records request. While the Association provided over 1,000 pages of documents, Galpin contested the omission of multi-year, vendor-specific ledgers and transactional data requested in Excel or CSV formats. The Association maintained that it had produced all records kept in the ordinary course of business and was not legally obligated to create new reports or convert raw digital data into specific formats to satisfy a member's request.

On April 15, 2026, Administrative Law Judge (ALJ) Nicole Robinson issued a final decision denying the petition. The ruling affirmed that state law requires the disclosure of existing records but does not compel an association to generate new documents or reformat data into a requester's preferred digital medium.

Analysis of Key Themes

1. Statutory Interpretation: "Production" vs. "Creation"

A central conflict in the case was the distinction between producing an existing record and creating a new one. The Association, represented by attorney Mark Lines and witness Austin Haywood, argued that the requested multi-year ledgers (specifically items #3 and #5 of the request) did not exist as standalone documents in their management software, Caliber.

  • Petitioner’s View: Galpin argued that because the data exists within the software, "converting" that data into a readable Excel or CSV format is a statutory requirement of making records "available." She cited A.R.S. § 10-11601(D), asserting that corporations must convert digital records into written form upon request.
  • Respondent’s View: The Association contended that generating a multi-year report requires "extracting and converting" data in a way that creates a new record not maintained in the ordinary course of business.
  • Legal Conclusion: The ALJ ruled that A.R.S. § 33-1258 does not require an association to create new documents or generate data into a particular format.
2. The Scope of "All Financial Records"

The Petitioner relied on the broad language of A.R.S. § 33-1258(A), which states that "all financial and other records of the association shall be made reasonably available." Galpin interpreted this to include the "bits and bytes" or "ones and zeros" inside the computer, arguing that a summary monthly statement is "non-transparent" and hides potential errors or mis-postings.

The Association countered by providing:

  • Monthly financial statements (P&L, Balance Sheets).
  • Bank statements and reconciliation reports.
  • Check registers.
  • Specific invoices for vendors (when they existed).

The court found the Association's production of these materials—totaling over 1,000 pages across two requests—to be sufficient under the law.

3. Management Software and Technical Constraints

The testimony of Austin Haywood provided insight into the technical operations of HOA management:

  • Software: The Association uses Caliber for accounting and Strongroom for third-party accounts payable.
  • Workflow: Invoices are received as PDFs, approved by various personnel (up to 15 people involved in the process), and stored electronically.
  • Data Integrity: Haywood testified that while transactional data exists, the "records" maintained for the Association are the compiled monthly reports provided to the Board, not the raw data exports Galpin requested.
4. Record Retention Policies

A secondary dispute involved the duration of record-keeping. The Association's "HOA Records Retention Policy" (revised January 1, 2019) stipulates a 3-year retention period for most financial documents, including bank statements, budgets, and monthly financial statements. Galpin argued for a 7-to-10-year period based on tax and legal standards, but the ALJ noted that the Association is governed by its own policy and the specific requirements of Title 33.

Important Quotes

Regarding the Obligation to Create Records

"The statutory framework governing condominium records requests draws a clear line between an association’s obligation to disclose the records it maintains and the impermissible burden of requiring the creation of new ones." — Respondent’s Answer, December 8, 2025

Regarding Digital Records

"The digital records that reside inside the computer are the other half… If a person can't use the records, the state would not even create this [transparency act] and say you can look at everything." — Ann Galpin, Petitioner, Closing Statement

Regarding the Final Ruling

"Respondent successfully argued that Ariz. Rev. Stat. § 33-1258, does not require an Association to create new documents or generate data into a particular format." — ALJ Nicole Robinson, Final Decision

Summary of the October 14, 2025, Records Request

The following table outlines the five categories of records requested by Galpin and the eventual status of those requests according to the hearing evidence:

Item # Description Status / Resolution
1 October 2025 Board Election records (ballots, tally sheets). Provided by the Association.
2 Detailed Monthly Financials (April–Sept 2025). Provided by the Association.
3 Multi-year General Ledger (2018–2025) in Excel/CSV. Denied (Required creation of new reports).
4 Specific invoices for Splashaway, AZ Red Mountain, and G. Quintana. Provided by the Association.
5 Detailed Vendor Ledgers (2018–2025) for 11 specific vendors. Denied (Required creation of new reports).

Actionable Insights

  • Establish Clear Record Boundaries: Homeowners associations are not required to act as data analysts for members. While "all financial records" must be available, this is limited to records that actually exist in the format they are kept by the association.
  • Format Flexibility: Requesters may "prefer" Excel or CSV formats, but an association satisfies its legal burden by providing records in the format they are maintained (e.g., PDF or hard copy).
  • Custodian Credibility: The ALJ relied heavily on the "credible testimony" of the management company's Vice President. HOAs should ensure their custodians of records are intimately familiar with their software capabilities and retention policies.
  • Retention Policy Defense: Having a written, board-approved Records Retention Policy provides a legal defense against expansive requests for ancient data. In this case, the Association's 3-year policy was a significant factor in limiting the scope of required production.
  • Mootness of Resolved Items: By providing items #1, #2, and #4 quickly, the Association successfully narrowed the legal battle to the technical "creation" issue, which was ultimately easier to defend.

Study Guide: Galpin v. University Shadows Homeowners Association, Inc.

This study guide provides a comprehensive overview of the administrative hearing case Ann Galpin v. University Shadows Homeowners Association, Inc. (Case No. 25F-H099-REL). It covers the legal dispute regarding records requests under Arizona law, the arguments presented by both parties, and the final judicial determination.

Case Overview

The case involves a dispute between Ann Galpin (Petitioner), a member of the University Shadows Homeowners Association, and the Association (Respondent) regarding the disclosure of financial and vendor records. The central conflict involves whether a homeowners association (HOA) is required to generate new reports or convert digital data into specific formats (such as Excel or CSV) to satisfy a member’s records request under Arizona Revised Statutes (A.R.S.) § 33-1258.

Key Entities and Figures
Entity/Figure Role
Ann Galpin Petitioner; a 29-year member and resident of University Shadows.
University Shadows HOA Respondent; a condominium association located in Tempe, Arizona.
Nicole Robinson Administrative Law Judge (ALJ) at the Office of Administrative Hearings (OAH).
Heywood Community Management The management company and custodian of records for the Association.
Austin Heywood Vice President of Heywood Community Management; witness for the Respondent.
Mark Lines Attorney representing the University Shadows Homeowners Association.
Trevan Nuttle Managing agent for the Association; observer at the hearing.

Core Concepts and Legal Framework

1. Statutory Authority: A.R.S. § 33-1258

This is the primary statute governing the disclosure of records for condominium associations in Arizona.

  • General Rule: All financial and other records of the association must be made reasonably available for examination by any member or their designated representative.
  • Timeline: The association has ten business days to fulfill a request for examination or provide copies.
  • Exceptions (Subsection B): Records may be withheld if they relate to privileged attorney-client communication, pending litigation, certain closed-session meeting minutes, or personal/financial records of individual members or employees.
2. Records Retention Policy

The Association operates under a specific Records Retention Policy (revised January 1, 2019):

  • Permanent Records: Articles of Incorporation, Bylaws, CC&Rs, Meeting Minutes (Annual and Board), and Plat Maps.
  • Three-Year Retention: Assessment information, bank statements, budgets, contracts, general correspondence, financial reporting/documents, and tax returns.
3. The "Creation vs. Conversion" Debate
  • Petitioner's View: Argued that digital data (binary "ones and zeros") inside accounting software constitutes a record and must be converted into a written, usable form (like Excel) per A.R.S. § 10-11601(D).
  • Respondent's View: Argued that the law requires the disclosure of existing records kept in the ordinary course of business. Generating a new report (e.g., a seven-year vendor history) constitutes the creation of a new record, which is not required by statute.

Chronology of the Dispute

Date Event
April 22, 2025 Petitioner makes an initial request for various records.
May 31, 2025 Association provides approximately 1,000 pages of documents but limits financial history to three years.
October 14, 2025 Petitioner submits a new written request for five categories of records (#1 through #5).
October 31, 2025 Association provides 25 attachments covering categories #1, #2, and #4.
November 11, 2025 Petitioner files a petition with the Arizona Department of Real Estate alleging non-compliance regarding items #3 and #5.
February 13, 2026 Prehearing conference held to define the scope of the hearing.
March 26, 2026 Formal evidentiary hearing conducted at the Office of Administrative Hearings.
April 15, 2026 ALJ Nicole Robinson issues a decision denying the petition.

Summary of the Contested Records (Items #3 and #5)

The hearing focused specifically on two items from the October 14, 2025, request that the Petitioner claimed were unfulfilled:

Item #3: Multi-Year Ledgers (2018–2025)

Petitioner requested the following in Excel or CSV format for a seven-year period:

  • Detailed General Ledger.
  • Detailed Accounts Payable Ledger.
  • Detailed Accounts Receivable Ledger.
  • Check Registers for all accounts (open or closed).
Item #5: Vendor-Specific Records

Petitioner requested a "Detailed Vendor Ledger" (2018–2025) and all supporting documentation (agreements, change orders, invoices, walkthroughs) for 11 specific vendors, including Heywood Community Management, ASAP Restoration, and Atlas Companies.

Short-Answer Practice Questions

  1. What was the Respondent’s primary justification for not providing the records in Category #3?
  • Answer: The Respondent argued that the requested multi-year ledgers in Excel/CSV format did not exist as standalone records in the ordinary course of business and would require the creation of new reports by extracting and reorganizing data.
  1. **Which Arizona statute did the ALJ determine was not applicable to this condominium association dispute?**
  • Answer: A.R.S. § 10-11601 (which the Petitioner cited regarding the conversion of records).
  1. According to the Association's witness, what accounting software is used to manage University Shadows?
  • Answer: Caliber.
  1. What was the total number of documents provided to the Petitioner in response to her April 2025 request?
  • Answer: Approximately 1,000 pages (provided on two flash drives).
  1. How many business days does an association have to fulfill a records request under A.R.S. § 33-1258?
  • Answer: Ten business days.
  1. Why did the Association refuse to provide "Aged Owner Balance Reports"?
  • Answer: Because those reports contain personal financial information of individual members, which is protected from disclosure under A.R.S. § 33-1258(B)(4).
  1. What specific period of time did the Petitioner’s October request cover for the financial ledgers?
  • Answer: July 1, 2018, through September 30, 2025.

Essay Prompts for Deeper Exploration

  1. Transparency vs. Administrative Burden: Evaluate the balance between a member’s right to "transparency" and an association’s right to be free from "impermissible burdens." Use the arguments from both Ann Galpin and the Association's counsel to support your analysis.
  2. The Definition of a "Record": In the digital age, does "data" residing in a database constitute a "record" before it is printed or exported? Discuss how the ALJ’s decision in this case defines the boundaries of what constitutes an "existing record" under Arizona HOA law.
  3. Statutory Interpretation: Ann Galpin argued that the "intent" of A.R.S. § 33-1258 is disclosure and transparency, while the Association argued for a literal "letter of the law" approach. Discuss the implications of these two different styles of statutory interpretation on the final outcome of the case.

Glossary of Important Terms

  • A.R.S. § 33-1258: The Arizona Revised Statute governing the inspection of records for condominium associations.
  • Caliber: The specific accounting and management software utilized by Heywood Community Management to maintain Association data.
  • Cash Basis Accounting: An accounting method where receipts are recorded during the period they are received and expenses are recorded in the period they are actually paid.
  • CSV (Comma-Separated Values): A plain-text file format used to store tabular data, often used for exchanging data between different applications like Excel.
  • Detailed General Ledger: A comprehensive record of all financial transactions of a business or organization over its entire life or a specific period.
  • OAH (Office of Administrative Hearings): An independent Arizona state agency that conducts hearings for various state regulatory matters.
  • Preponderance of the Evidence: The burden of proof in civil and administrative cases, meaning that the existence of a fact is more probable than its nonexistence.
  • Strongroom: A third-party accounts payable (AP) software system used by the management company to store and process electronic invoices.
  • Subledger: A detailed subset of accounts (like Accounts Payable or Accounts Receivable) that rolls up into the General Ledger.

The Limits of Transparency: Lessons from Galpin v. University Shadows HOA

1. Introduction: The Battle for the Books

In the world of community associations, few issues ignite as much friction as the "battle for the books." When a homeowner suspects financial mismanagement—or simply demands total visibility—the tension between a member's right to inspect records and a Board’s operational reality often results in litigation. The case of Ann Galpin v. University Shadows Homeowners Association, Inc. (No. 25F-H099-REL) serves as a definitive case study for Arizona HOAs. It addresses a fundamental question of modern governance: Does an Association’s duty to provide access to records include an obligation to "data mine" its software to create new, customized reports or convert digital data into a specific format to satisfy a member’s request?

2. Case Background: Ownership History and the Scope of the Dispute

The petitioner, Ann Galpin, a 29-year owner in the Tempe-based University Shadows condominium, initiated a series of aggressive record requests starting in April 2025. In response to her initial inquiries, the Association was remarkably transparent, producing over 1,000 pages of documentation and two separate flash drives. Despite this, Galpin filed a subsequent request on October 14, 2025, which ultimately led to an administrative hearing.

The dispute centered on two specific categories (Categories #3 and #5) spanning from 2018 to 2025. Galpin’s demand was not for existing documents, but for the generation of specific, multi-year compilations including:

  • Detailed General Ledgers in Excel or CSV format.
  • Accounts Payable and Receivable Ledgers in Excel or CSV format.
  • Vendor-Specific Ledgers (spanning seven years) for 11 specific contractors: ASAP Restoration, Asphalt Restoration Services, Atlas Companies, 5 Guys, LG Painting, Great Western Landscaping, Great Western Tree, Great Western Pest, Green Keeper Landscaping, Green Keeper Tree, Swain Asphalt, and Heywood Community Management.
  • Supporting Materials: Change orders, communications, and "standing walkthrough notes" related to these vendors.

Crucially, the Association’s formal Records Retention Policy (Exhibit 10) mandates that "Financial Reporting and Documents" and "Bank Statements" are only maintained for 3 years. Galpin was demanding data four years beyond the Association's legal retention window.

3. The "Creation vs. Production" Conflict

During the hearing on March 26, 2026, the legal arguments hinged on the definition of a "record."

The Petitioner’s Stance: Galpin argued that the Association was withholding "digital records." She contended that because the Association uses accounting software, the data exists as "bits and binary data" that must be "converted" into a readable written form (like Excel) per ARS § 10-11601(D). She distinguished between "source documents" (invoices) and the underlying "digital records" stored within the software.

The Respondent’s Stance: Led by attorney Mark Lines and witness Austin Haywood, the HOA argued that they had already complied with the law. They maintained that the multi-year, vendor-specific reports Galpin sought did not exist in the ordinary course of business. To provide them, the HOA would have to generate a new report rather than simply produce an existing one.

The Disconnect: Petitioner Requests vs. Association Records

Petitioner Requested (Excel/CSV Ledgers) Association Maintained (Ordinary Course)
7-year continuous General Ledger in Excel Monthly reconciled financial reports (3-year retention)
Multi-year Vendor-Specific Ledgers Individual invoices and monthly check registers
Data "converted" into CSV format Reconciled bank statements (PDF or Paper)
"Standing Walkthrough Notes" Do Not Exist / Not Maintained as Official Records
4. Technical Insights: The HOA’s Accounting Workflow

The testimony of Austin Haywood provided a sophisticated look at the technical reality of HOA management. The Association utilizes Caliber for core accounting and Strongroom for managing third-party payables.

As a matter of internal control and financial integrity, the Association maintains a strict separation of duties:

  1. Entry: One individual enters bills and invoices into the system.
  2. Payment: A separate individual processes the payments.
  3. Reconciliation: A General Ledger (GL) accountant reconciles these disparate actions against bank statements to produce the monthly reports used by the Board.

Because of this workflow, the "General Ledger" is a compiled result of these separate duties. The HOA argued effectively that while the raw data exists within the software, a "Vendor Ledger" is a report that must be specifically generated. If the Board does not use or maintain such a report for its monthly business, it is not an "existing record."

5. The Legal Verdict: Interpreting ARS § 33-1258

On April 15, 2026, Administrative Law Judge Nicole Robinson issued her decision, denying Galpin’s petition. The ruling was a significant win for Associations on two fronts:

First, the Judge clarified the statutory authority. While Galpin relied on ARS § 10-11601 (Nonprofit Corporations), the Judge ruled that this statute does not govern condominiums in this context. Instead, the dispute was decided strictly under ARS § 33-1258.

Second, the Judge established a clear boundary regarding format and creation. The verdict explicitly stated: "The statute does not require an Association to create new documents or generate data into a particular format." The law compels the disclosure of existing records, not the performance of customized accounting services or data conversion for a member's convenience.

6. Key Takeaways for Homeowners and Boards

This ruling serves as a vital precedent for community associations and legal analysts:

  1. Format is Not a Mandate: While owners often prefer Excel or CSV files for their own analysis, an HOA is not legally required to "convert" its records if they are maintained as PDFs or paper files.
  2. Creation vs. Access: There is a sharp legal distinction between inspecting records and demanding the generation of custom reports. Transparency laws apply to what is in the file cabinet—physical or digital—not what could be produced via software.
  3. The Supremacy of Retention Policies: Boards must adhere to their retention schedules. As shown in Exhibit 10, because the HOA only retained financial records for 3 years, Galpin’s request for 2018 data was legally unenforceable.
  4. The Burden of Proof: In an administrative hearing, the burden lies with the petitioner. As the Judge noted, Petitioner had no proof that the Association actually possessed the requested records and refused to provide them; "presuming" a record exists is legally insufficient.
7. Conclusion: Moving Toward Clarity

The Galpin v. University Shadows decision reinforces that "transparency" is grounded in the production of existing business records, not the provision of customized "data mining." For boards, the lesson is to maintain a clear records retention policy and a consistent accounting workflow. For homeowners, the lesson is that while the right to inspect is broad, it is limited to the records the Association actually uses to conduct its business. Understanding this distinction is the only way for both parties to avoid the significant costs of administrative hearings.

Case Participants

Petitioner Side

  • Ann Galpin (Petitioner)
    University Shadows Homeowners Association, Inc.

Respondent Side

  • Mark Lines (Attorney)
    Shaw & Lines, LLC
  • Austin Haywood (Vice President / Managing Agent / Witness)
    Heywood Community Management
    Also spelled Austin Heywood in the final decision.
  • Trevan Nuttle (Manager / Client Representative)
    Heywood Community Management
    Also spelled Treven Nuttall in the final decision.
  • Carly (Assistant)
    Heywood Community Management
  • Larry Haywood (Manager)
    Heywood Community Management

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • John Sullivan (Observer)
  • Gabrielle Quintana (Homeowner)
    Referenced in relation to an insurance claim/water loss analysis records request.

Suzanne Thomas v. Woodland Hills Improvement Association

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Case Summary

Case ID 25F-H075-REL
Agency Arizona Department of Real Estate
Tribunal Office of Administrative Hearings
Decision Date 2026-04-13
Administrative Law Judge —
Outcome Dismissed
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Suzanne Thomas Counsel Pro se
Respondent Woodland Hills Improvement Association Counsel Melissa Tone

Alleged Violations

No violations listed

Video Overview

Audio Overview

Briefing Document: Suzanne Thomas v. Woodland Hills Improvement Association

Executive Summary

This document provides a comprehensive analysis of the administrative hearing Suzanne Thomas v. Woodland Hills Improvement Association (No. 25F-H075-REL), conducted before the Arizona Office of Administrative Hearings (OAH). The dispute centered on a petition filed by homeowner Suzanne Thomas (Petitioner) alleging that the Woodland Hills Improvement Association (Respondent/Association) violated Section 8.1 of the Covenants, Conditions, and Restrictions (CC&Rs) by failing to plant winter rye grass and maintain a grassy common area.

The conflict reflects a broader struggle between long-standing community traditions and a new Board of Directors’ efforts to modernize governance, address aging infrastructure, and respond to environmental realities in Tucson, Arizona. Following hearings on March 16 and March 24, 2026, Administrative Law Judge (ALJ) Velva Moses-Thompson issued a decision on April 13, 2026, dismissing the petition. The ALJ concluded that the CC&Rs do not mandate the planting of grass and that the Association’s previous practices of seasonal seeding were based on informal agreements rather than codified requirements.

Case Overview and Procedural History

The proceedings involved multiple continuances and a transition to virtual hearings due to a flood at the OAH offices.

Date Event
July 22, 2025 Suzanne Thomas files a petition alleging violations of CC&R Section 8.1.
September 30, 2025 Arizona Department of Real Estate issues a notice of hearing.
October 7, 2025 Continuance granted; hearing rescheduled for December 3, 2025.
December 1, 2025 OAH orders all hearings to be virtual due to an office flood.
Dec 2025 – Jan 2026 Multiple continuances granted for administrative and scheduling reasons.
March 16, 2026 Evidentiary Hearing Day 1: Testimony from Petitioner and witnesses.
March 24, 2026 Evidentiary Hearing Day 2: Testimony from Board and closing arguments.
April 13, 2026 ALJ Final Decision: Petition dismissed.

Analysis of Key Themes

1. Interpretation of Governing Documents

The central legal question was whether CC&R Section 8.1, which lists "mowing grass" and "sprinkler system" as common area expenses, created an affirmative duty for the Board to maintain a lawn.

  • Petitioner’s Argument: Section 8.1 implies the community was designed as a "grassy park." Petitioner argued that because the document includes "mowing grass" in the pro-rata share of operating expenses, the Board cannot unilaterally decide to eliminate it.
  • Board’s Argument: The Board contended that Section 8.1 is a general guideline for how dues may be spent if certain assets exist. If the Board decides to remove grass, "mowing" is no longer a necessary expense. They argued that the common area is under the Board's jurisdiction and management.
2. Informal Precedent vs. Formal Governance

The hearing revealed a history of "informal" operations within the 19-home community.

  • Historical Practice: For over 12 years, the community planted winter rye grass. Testimony from Frank Cushing and Barbara Evers indicated this was funded through a "balloon payment" or "assessment" collected every fall to avoid raising monthly dues.
  • Board Modernization: The current Board (elected in late 2024) sought to formalize these processes. They argued that because the grass seeding was never part of the formal annual pro-rata budget, it constituted a "Special Assessment" requiring a two-thirds majority vote under CC&R Section 8.7. A vote was held, but it failed to reach the 13-vote threshold, leading the Board to cancel the seeding.
3. Financial and Ecological Stewardship

The Board justified the move to xeriscaping (desert landscaping) through two primary lenses:

  • Fiscal Responsibility: Treasurer Shawn Kopriva testified that grass maintenance and watering previously consumed 74% of the Association's budget. The community is 53 years old and requires urgent repairs to galvanized pipes, rusting ironwork around the pool, and lamp posts.
  • Ecological Reality: The Board cited Tucson’s dwindling water tables and potential 77% reduction in Colorado River water allotments. They argued that planting "ornamental grass" that only survives five months a year is irresponsible.
4. Impact on Community Assets and Aesthetics
  • Property Values: Petitioner provided evidence (Zillow/MLS listings) suggesting that homes in their community ("Woodland Hills 1") sold for higher prices than the twin community ("Woodland Hills 2") because of the lush grass and tree canopy.
  • The "Legacy Trees": Both parties expressed concern for 90+ "heritage" mesquite trees. Petitioner argued that stopping the sprinklers would kill trees that have adapted to shallow watering for 50 years. The Board countered that shallow watering from sprinklers made the trees unstable and dangerous, as evidenced by limbs falling onto patios.

Important Quotes and Context

Regarding CC&R Duties

"It is not mandating we have grass. It’s saying to a homeowner that if we have grass, your dues may go to paying for the grass."

— Melissa Tone, Board Secretary Context: Explaining the Board's interpretation of Section 8.1 as a permissive rather than mandatory spending guideline.

Regarding Historical Practice

"We were very, very informal or we were a very informal organization up until the current regime… it was a normal assessment as a balloon payment essentially on our normal dues."

— Frank Cushing, Witness and Former President Context: Describing the community's 12-year history of paying for winter grass without a formal 2/3 vote.

Regarding the Shift to Xeriscaping

"We have an opportunity right now to pivot from the past to the future and that future should be xeriscaping attracting pollinators and birds that this region is known for."

— Melissa Tone, Board Secretary Context: Outlining the Board’s vision to move away from high-maintenance turf toward sustainable desert beauty.

Regarding Legal Authority

"The common area is under the jurisdiction, the choice of the board at the time… the any cost, any special assessment would come under a vote."

— Mary Claire Lazar, Board President Context: Summarizing legal counsel received regarding the Board's power to change landscaping without a community vote, provided they use existing funds rather than new assessments.

Key Data Points

  • Financial Impact of Grass: Seeding costs approximately $6,000 annually.
  • Historical Budget Allocation: Grass and water accounted for 74% of the total budget under previous leadership.
  • Infrastructure Liability: Replacing the galvanized pipe system is estimated at $75,000; pool ironwork repairs are estimated at over $15,000.
  • Community Size: The Association consists of 19 townhomes.
  • Grass Vote Results (2025): 11 votes in favor of seeding, 8 votes against. (Failed to meet the 13-vote requirement for a Special Assessment).

Actionable Insights and Conclusions

Legal Precedent Established

The ALJ’s decision clarifies that specific mentions of maintenance tasks (like "mowing grass") in CC&Rs do not necessarily mandate the perpetual existence of the asset being maintained. Unless the governing documents explicitly require a specific type of landscaping, the Board retains the authority to modify common areas as part of its management duties.

Governance Requirements

The dispute highlights the danger of "informal" financial arrangements in HOAs. The Association's failure to codify the grass payment as a regular assessment allowed the current Board to reclassify it as a Special Assessment, effectively giving a minority of homeowners (those voting "no") the power to block the tradition.

Transition to Sustainability

The Association is now legally cleared to proceed with its xeriscaping plan. To ensure community cohesion following this divisive case, the following steps were identified during the hearing:

  • Incremental Implementation: The Board plans a gradual transition to desert landscaping to manage costs and allow residents to adapt.
  • Strategic "Islands": The Board is considering artificial turf "islands" (approximately 3,000 sq. ft. total) to maintain some greenery while eliminating water use.
  • Tree Care: Specialized watering plans for the heritage mesquite trees (drip systems or deep watering) are necessary to prevent the "decline and death" warned of by the University of Arizona Cooperative Extension.

Dispute Analysis: Thomas v. Woodland Hills Improvement Association

This study guide provides a comprehensive overview of the administrative hearing between Suzanne Thomas (Petitioner) and the Woodland Hills Improvement Association (Respondent), docketed as No. 25F-H075-REL. The case centers on the interpretation of homeowners' association (HOA) governing documents regarding landscaping requirements, financial assessments, and environmental stewardship in Tucson, Arizona.

I. Case Fundamentals and Core Themes

1. Central Legal Dispute

The primary issue was whether the Woodland Hills Improvement Association (the Association) violated section 8.1 of its Covenants, Conditions, and Restrictions (CC&Rs) by failing to plant winter grass. The Petitioner contended that the CC&Rs mandated grass maintenance, while the Respondent argued that landscaping choices fall under the Board’s discretionary authority to manage common areas.

2. Key Entities and Figures
  • Petitioner: Suzanne Thomas, a homeowner in the Woodland Hills I development.
  • Respondent: Woodland Hills Improvement Association (represented by the Board of Directors).
  • Administrative Law Judges (ALJ): Samuel Fox (initial orders) and Velva Moses-Thompson (final decision).
  • Witnesses for Petitioner: Frank Cushing (former board member), Barbara Evans (long-time resident).
  • Witnesses for Respondent: Melissa Tone (Secretary), Mary Claire Lazar (President), Terry Turner (Vice President), Shawn Kopriva (Treasurer).
3. Primary Governing Documents
  • CC&R Section 8.1 (Operating Expenses): Outlines that owners pay a pro-rata share for maintenance of common areas, including activities such as "mowing grass, caring for the grounds, sprinkler system, [and] swimming pool."
  • CC&R Section 8.7 (Special Assessments): Requires a two-thirds (2/3) majority vote of the members to approve assessments for capital improvements or unexpected repairs.
  • Bylaws Article 8: Outlines the powers and duties of the Board, including the preparation of an annual budget.

II. Competing Arguments and Evidence

The Petitioner’s Perspective (Suzanne Thomas)

The Petitioner’s case rested on historical precedent and a literal interpretation of the CC&Rs as a mandate for a specific aesthetic.

  • Codified Requirement: Argued that because CC&R 8.1 mentions "mowing grass," the community is inherently a "grass community."
  • Historical Precedent: The community had maintained grass since its inception in 1973. Although it transitioned from Bermuda to Ryegrass around 2010–2012, the presence of grass remained a constant expectation.
  • Ecological Impact: Testimony suggested that the "legacy" mesquite trees (some over 100 years old) have developed shallow root systems due to 50 years of sprinkler irrigation. Stopping the watering of grass would allegedly lead to the decline and eventual death of these trees.
  • Property Value: Provided evidence from home listings and sales data suggesting that the "park-like setting" provided by the grass led to higher property values compared to the neighboring Woodland Hills II, which had removed its grass.
The Association’s Perspective (The Board)

The Board’s case focused on fiscal responsibility, environmental necessity, and the legal flexibility of the governing documents.

  • Discretionary Maintenance: Argued that CC&R 8.1 lists items that may be maintained if they exist, but does not compel the Association to maintain a specific feature (e.g., if there is no pool, there is no duty to pay for pool maintenance).
  • Water Scarcity and Climate: Noted that Tucson faces significant cuts to its Colorado River (CAP) allotment. Argued that planting "non-use ornamental grass" that only lives for five months is irresponsible in a desert environment.
  • Fiscal Responsibility: Stated that the Association was "grass poor," with lawn maintenance and water previously consuming up to 74% of the budget. Funds were needed for critical infrastructure, such as aging galvanized pipes, ironwork repairs (estimated at $15,000 for the pool fence), and sidewalk safety.
  • Voting Thresholds: Asserted that seeding grass was historically handled as a "special assessment" because it was not in the regular budget. Since recent votes for seeding did not reach the 2/3 majority required by CC&R 8.7 (recent votes were 11-7 and 11-8), the Board could not legally move forward with the assessment.

III. Short-Answer Practice Questions

  1. What was the final decision of the Administrative Law Judge regarding the Petitioner’s claim?
  • Answer: The ALJ dismissed the petition, concluding that the Association did not violate CC&R 8.1 and is not required to plant grass.
  1. According to the Board, what percentage of the budget did grass-related costs consume in the past?
  • Answer: Approximately 74%.
  1. What specific environmental concern did the Petitioner raise regarding the removal of the sprinkler system?
  • Answer: That the 90+ legacy mesquite trees would decline and die due to their reliance on the shallow watering provided by the grass sprinklers.
  1. Why did the Board argue that a "two-thirds" vote was necessary for planting grass?
  • Answer: Because they classified the cost of seeding as a "special assessment" under CC&R 8.7, rather than a regular operating expense.
  1. What alternative landscaping plan did the Board propose?
  • Answer: "Xeriscaping" or desert landscaping, which includes heat-tolerant plants, cacti, and "islands" of artificial turf to attract pollinators and provide year-round color.
  1. How did the ALJ characterize the Association's past decision to pay for grass in the fall?
  • Answer: The ALJ characterized it as an "informal" agreement that was never codified or added as an amendment to the governing documents.

IV. Essay Prompts for Deeper Exploration

  1. The Interpretation of "Mandatory" vs. "Permissive" Language: Analyze the language of CC&R Section 8.1. Does the inclusion of the phrase "including, but not limited to, mowing grass" create an affirmative duty for the Board to ensure grass exists to be mown, or does it merely describe how funds may be spent if grass is present? Support your argument using the findings of the Administrative Law Judge.
  2. Environmental Stewardship vs. Historical Aesthetic: Evaluate the tension between the homeowners' desire to maintain a 50-year-old "park-like" ecosystem and the Board's argument regarding the Tucson water crisis. To what extent should an HOA board be allowed to override established community traditions in the name of ecological and fiscal necessity?
  3. The Validity of Informal Precedents: In the hearing, the Petitioner relied heavily on 13 years of precedent and informal voting to argue that grass was a standard maintenance item. The ALJ ultimately ruled these informal agreements were not binding. Discuss the risks and benefits of HOAs operating "informally" and the legal implications when those informal practices are challenged by new leadership.

V. Glossary of Important Terms

Term Definition
CC&Rs Covenants, Conditions, and Restrictions; the legal documents that govern the use of property and the operations of a homeowners' association.
Special Assessment A fee levied by an HOA board in addition to regular dues, typically for major repairs or capital improvements, often requiring a higher voting threshold for approval.
Pro-rata Share A proportionate allocation of expenses among all owners; in this case, 1/19th of the actual costs per home.
Xeriscaping A style of landscape design that requires little or no irrigation or other maintenance, used often in arid regions.
Legacy Trees Mature trees (such as the mesquite trees mentioned in the case) that have significant age and value to the community’s ecosystem and property value.
Administrative Law Judge (ALJ) A judge who conducts hearings and makes decisions for government agencies, such as the Office of Administrative Hearings.
Continuance A legal order to postpone a hearing to a later date.
Petitioner The party who files a petition or brings a case to court (Suzanne Thomas).
Respondent The party against whom a petition is filed (Woodland Hills Improvement Association).
Bermuda vs. Rye Two types of grass; Bermuda is a summer grass that goes dormant in winter, while Ryegrass is a winter grass seeded annually in the fall.

From Green Lawns to Desert Landscapes: Inside the Woodland Hills HOA Legal Dispute

1. Introduction: A Community at a Crossroads

In the sun-drenched suburbs of Tucson, Arizona, the Woodland Hills Improvement Association recently became the site of a landmark legal battle over the future of the American Southwest’s landscape. The dispute mirrors a growing regional tension: the clash between long-standing community tradition and the harsh realities of environmental and fiscal sustainability.

At the center of the conflict was a petition filed by homeowner Suzanne Thomas against the Association’s Board of Directors. The catalyst was the Board's decision to cease the decades-old practice of planting winter rye grass, opting instead for a transition toward a sustainable "zero-scape" aesthetic. The case eventually narrowed to a pivotal legal question: Does a specific mention of "mowing grass" within community bylaws mandate that a board maintain that grass in perpetuity, or is it merely an example of a permissible expense?

2. The Petitioner's Case: Tradition, Property Value, and Legacy Trees

Suzanne Thomas, representing nearly half of the 19-home community, argued that the Board was abandoning its foundational duties to maintain the character and value of the neighborhood. Her case rested on the expectation of a "park-like" setting that has defined the development for half a century.

The Case for Tradition

  • A 50-Year Legacy: Residents testified that the community has featured lush grass since its inception in 1973. Thomas argued that homeowners purchased their properties with the explicit expectation that this specific aesthetic would be preserved.
  • Quantifiable Property Disparity: Drawing on real estate data, Thomas highlighted a significant gap in market value between Woodland Hills 1 (the subject of the dispute) and the neighboring Woodland Hills 2, which had previously transitioned away from grass. She noted that homes in Woodland Hills 1 were valued at approximately $175 per square foot, whereas those in the grassless Woodland Hills 2 hovered between $134 and $158 per square foot.
  • Environmental and Health Risks: Thomas expressed concerns that removing the ground cover would create a "dust bowl," leading to respiratory issues for the community’s many seniors, including those suffering from COPD and allergies.
  • The Health of Legacy Trees: The community is home to over 90 legacy mesquite trees. Citing an expert from the University of Arizona Cooperative Extension, Thomas argued that these trees developed shallow root systems due to 50 years of sprinkler irrigation. The expert warned that while the trees might not perish immediately, without supplemental water, they will "decline and die eventually."
3. The Board’s Defense: Sustainability and Fiscal Responsibility

The Board—comprised of Melissa Tone, Claire Lazar, Terry Turner, and Sean Kopriva—defended their decision as an exercise of their fiduciary duty. They argued that they were acting as responsible stewards of the Association's dwindling funds and Arizona’s increasingly scarce water resources.

Challenges to Modern HOA Management

Issue Impact Board’s Proposed Solution
Water Scarcity Looming loss of up to 77% of Colorado River (CAP) allotments in Tucson. Transition to "zero-scaping" with native, drought-tolerant plants.
Aging Infrastructure 53-year-old galvanized pipes and rusted ironwork around the pool that is no longer to code. Reallocate funds ($75,000 for pipes; $15,000 for iron) to critical structural repairs.
Budgetary Strain Grass maintenance and watering previously consumed 74% of the total budget. Prioritize essential "grounds maintenance" over seasonal "ornamental" grass.

The Board’s "pivot to the future" involves replacing the high-maintenance rye grass with native pollinator-friendly plants and strategically placed "islands" of high-quality artificial turf to maintain visual appeal without the ecological cost.

4. The Legal Pivot: Special Assessments vs. Regular Maintenance

The legal core of the dispute focused on the classification of the grass-seeding costs.

  • The Petitioner’s View: Thomas argued that seeding is a standard maintenance task explicitly covered under CC&R Section 8.1, which lists "mowing grass" as a common expense. She contended the Board was required to include these costs in the regular operating budget.
  • The Board’s View: The Board countered that while the Association may mow grass if it exists, it is not mandated to plant it. They reclassified the seasonal seeding as a "nice to have" special assessment. When the 2025 budget was put to a vote, it failed to reach the required 2/3 majority (the result was 11 in favor, 8 against). The Board used this failure to justify the cessation of the grass, arguing that since the community would not explicitly approve it as an "extra," they had no duty to provide it.
5. The Verdict: The Administrative Law Judge's Decision

On April 13, 2026, Administrative Law Judge Velva Moses-Thompson issued a final ruling in favor of the Association. The decision clarified that the Board had not violated its governing documents by choosing to let the winter rye tradition end.

The Judge noted that while the CC&Rs provide examples of activities the Board may fund, they do not create a permanent mandate for specific landscaping assets. Verbatim, the Judge’s conclusion stated:

"The Administrative Law Judge concludes that the Association is not required to plant grass under CC&R § 8.1 or any other governing documents."

The ruling further emphasized that the community’s 12-year history of "informal" fall payments did not constitute a formal amendment to the CC&Rs. Consequently, the Board was within its authority to prioritize the Association’s fiscal health and infrastructure over the maintenance of the grass.

6. Key Takeaways for Homeowners and Boards

This case serves as a critical precedent for community associations across the Southwest. Key lessons include:

  1. Language Matters: The phrase "including but not limited to" in Section 8.1 granted the Board discretion. It defined their authority to spend on grass if it existed, but did not strip them of the power to remove it.
  2. Informal Precedent vs. Written Code: For over a decade, the community relied on "informal" fall balloon payments for seed. The court found that these long-standing traditions carry no legal weight compared to the codified bylaws. Communities wishing to protect specific features must ensure they are explicitly mandated in writing.
  3. The Fiduciary Duty of Evolution: The Board successfully argued that their primary duty was to address the "ground maintenance" of a 53-year-old property, ranging from galvanized pipes to heritage tree care, which outweighed the aesthetic preference for winter rye.
  4. Environmental Realities: The ruling acknowledges that as water tables deplete and municipal allotments shift, Boards have the right—and perhaps the obligation—to adapt landscaping to the local climate.
7. Conclusion: The Future of the Common Area

The Woodland Hills dispute marks the end of an era for this Tucson community. As the "status quo" of the last 50 years yields to the necessity of the next 50, the Association faces the task of healing internal divisions while managing its new desert landscape.

For real estate professionals and homeowners alike, this case is a harbinger. It demonstrates that in an era of water scarcity and aging infrastructure, the legal definition of "maintenance" is evolving. Balancing the nostalgic expectations of the past with the ecological and fiscal demands of the future is now the primary challenge of modern community governance.

Case Participants

Petitioner Side

  • Suzanne Thomas (Petitioner)
    Self-represented
  • Frank Cushing (Witness)
  • Barbara Evers (Witness)
    Also referred to as Barbara Evans in the ALJ decision

Respondent Side

  • Melissa Tone (Representative and Witness)
    Woodland Hills Improvement Association
    Secretary of the Board
  • Mary Claire Lazar (Witness)
    Woodland Hills Improvement Association
    President of the Board; also referred to as Clair Lazar in the ALJ decision
  • Terry Turner (Witness)
    Woodland Hills Improvement Association
    Vice President of the Board
  • Shawn Kopriva (Witness)
    Woodland Hills Improvement Association
    Treasurer of the Board; also spelled Copriva/Capria in transcripts and Koptiva in the ALJ decision

Neutral Parties

  • Velva Moses-Thompson (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over the hearings on March 16 and March 24, 2026
  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
    Issued multiple continuance orders
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

AZNH Revocable Trust vs Sunland Springs Village Homeowners

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Case Summary

Case ID 25F-H115-REL
Agency —
Tribunal —
Decision Date 2026-04-09
Administrative Law Judge —
Outcome Dismissed
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner AZNH Revocable Trust Counsel —
Respondent Sunland Springs Village Homeowners Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Case Analysis: AZNH Revocable Trust v. Sunland Springs Village Homeowners Association

Executive Summary

This briefing document details the administrative proceedings and eventual dismissal of Case No. 25F-H115-REL, involving the AZNH Revocable Trust (Petitioner) and the Sunland Springs Village Homeowners Association (Respondent). The matter, overseen by Administrative Law Judge (ALJ) Nicole Robinson at the Arizona Office of Administrative Hearings (OAH), centered on a records-related complaint regarding an annual meeting.

Despite multiple notices and an earlier continuance, the Petitioner failed to appear for the scheduled evidentiary hearing on April 6, 2026. The Petitioner's absence followed an unsuccessful attempt to stay the OAH proceedings through a special action in Superior Court and an expressed belief that the OAH lacked jurisdiction. Consequently, the ALJ issued a final decision on April 9, 2026, dismissing the complaint due to the Petitioner’s failure to meet the burden of proof.

Procedural History and Timeline

The following table outlines the key milestones in the case:

Date Event Details
January 14, 2026 Case Referral Arizona Department of Real Estate (ADRE) refers the matter to OAH.
January 30, 2026 Notice of Hearing Initial hearing set for March 6, 2026.
February 18, 2026 Order Granting Continuance Hearing rescheduled to April 6, 2026, at the request of the Petitioner.
April 6, 2026 Evidentiary Hearing Respondent appears; Petitioner is absent. Hearing is recorded but no evidence is taken.
April 9, 2026 Final Decision ALJ Nicole Robinson officially dismisses the complaint.

Detailed Analysis of Key Themes

1. Jurisdictional Challenges and Parallel Litigation

A primary theme of the proceedings was the Petitioner's challenge to the OAH’s authority. According to correspondence shared by the Respondent’s counsel, Chad Gallagher, the Petitioner (John Sullivan) filed a "special action" in Superior Court. The intent of this action was to strike the Association’s response and stay the OAH hearing.

The Superior Court denied the request for a stay, instructing the parties to stipulate to a continuance if they wished to delay the OAH matter. Despite an offer from the Respondent to stipulate, the Petitioner refused, reiterating a belief that the OAH lacked jurisdiction. ALJ Robinson clarified that for the ADRE, OAH decisions are considered final, regardless of the Petitioner’s stance on jurisdiction.

2. History of Repetitive Litigation

The Respondent characterized the complaint as a recurring issue. Counsel for the Association noted that this was the second time the Petitioner had raised "the exact same petition" regarding an annual meeting.

  • 2024 Annual Meeting: The Association previously prevailed in a case involving the 2024 meeting, proving compliance with the law.
  • 2025 Annual Meeting: The current matter (2025 meeting) involved a records request. The Association maintained it provided a "comprehensive pile of documents" and again complied with all legal requirements.
3. Failure to Prosecute

The Petitioner’s failure to appear at the April 6, 2026, hearing served as the technical basis for the dismissal. The OAH maintains a policy of waiting 15 minutes for parties to arrive and provides a 48-hour (two business day) window for parties to provide "good cause" for a missed hearing before vacating or dismissing the matter. The Petitioner provided no communication to the OAH explaining the absence, leading the ALJ to conclude that the Petitioner failed to meet the burden of presenting evidence in support of the complaint.

Important Quotes with Context

"He responded and said that his position is that he doesn't think the office of administrative hearings has jurisdiction and and and so he wasn't going to stipulate then."

— Chad Gallagher, Attorney for Respondent

Context: Gallagher explaining to the ALJ why a mutual agreement to postpone the hearing was not reached, despite the Superior Court's suggestion to do so.

"I know particularly with this agency meaning the Arizona department of real estate our decision is actually a final decision and if he wants to pursue something else that's fine but on this end if we do not hear from him then we will vacate it."

— ALJ Nicole Robinson

Context: The ALJ asserting the authority of the OAH in real estate matters, regardless of the Petitioner's external legal maneuvers or claims of lack of jurisdiction.

"The association feels like it did everything proper regardless. Um, this is the second time um petitioner has raised this exact same petition about our annual meeting."

— Chad Gallagher, Attorney for Respondent

Context: The Respondent's defense, highlighting their compliance with record-keeping laws and the repetitive nature of the Petitioner's filings.

Actionable Insights and Conclusions

  • Finality of Dismissal: The Order of Dismissal issued on April 9, 2026, is binding on both parties. Because the Petitioner failed to appear, no evidence was taken, and the Association was not found to have committed any penalty.
  • Avenues for Rehearing: Under Arizona Revised Statutes § 32-2199.04 and § 41-1092.09, any request for a rehearing must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of the Order (by approximately May 9, 2026).
  • Jurisdictional Precedent: The OAH proceeded with the hearing and dismissal despite the Petitioner’s claims of a lack of jurisdiction, signaling that administrative proceedings will continue unless a stay is specifically granted by a higher court.
  • Future Filings: The ALJ noted that because the dismissal was not "with prejudice" (a status usually reserved for settlements), it remains technically possible for the Petitioner to attempt to revisit the matter, though the Association intends to use its previous legal victories as a defense against future repetitive claims.

Administrative Law Study Guide: AZNH Revocable Trust v. Sunland Springs Village Homeowners Association

This study guide provides a comprehensive overview of the administrative proceedings in the matter of AZNH Revocable Trust v. Sunland Springs Village Homeowners Association (Case No. 25F-H115-REL). It covers the procedural history, key legal concepts, and the final resolution of the case before the Arizona Office of Administrative Hearings (OAH).

Section 1: Case Overview and Key Concepts

Administrative Framework

This case was adjudicated by the Office of Administrative Hearings (OAH), an independent state agency in Arizona. The matter was originally referred to the OAH by the Arizona Department of Real Estate on January 14, 2026, following a complaint involving a homeowners association (HOA).

Central Parties
  • Petitioner: AZNH Revocable Trust, represented by Trustees John and Susan Sullivan. The Petitioner initiated the complaint and was responsible for a $500 filing fee.
  • Respondent: Sunland Springs Village Homeowners Association. The Respondent was represented by Attorney Chad M. Gallacher and Community Manager Kathy Bowers (also referred to as Kathy Fowlers in documentation).
  • Adjudicator: Administrative Law Judge (ALJ) Nicole Robinson.
Procedural History
  1. Notice of Hearing: Issued January 30, 2026, for an initial date of March 6, 2026.
  2. Continuance: On February 18, 2026, the Petitioner requested a postponement. ALJ Robinson granted the request, rescheduling the hearing for April 6, 2026.
  3. Jurisdictional Dispute: Prior to the hearing, the Petitioner filed a "special action" in Superior Court to strike the Respondent's response and requested a stay of the OAH proceedings. The Superior Court denied the stay and instructed the parties to stipulate to a continuance if they wished to delay further.
  4. Refusal to Stipulate: Despite an offer from the Respondent to stipulate to a continuance, the Petitioner refused, claiming the OAH lacked jurisdiction over the matter.
  5. The Hearing (April 6, 2026): The hearing was convened at 1:18 PM. The Respondent was present; the Petitioner failed to appear.
The Final Decision

Because the Petitioner failed to appear, they failed to meet their burden of proof. On April 9, 2026, ALJ Robinson issued an Administrative Law Judge Decision dismissing the complaint. This order is binding unless a rehearing is requested within 30 days.

Section 2: Short-Answer Practice Questions

1. What was the specific docket number assigned to this administrative matter? Answer: The docket number was 25F-H115-REL (also referred to as 25115R in audio transcripts).

2. Where is the Office of Administrative Hearings located? Answer: 1740 West Adams Street, Lower Level, Phoenix, Arizona 85007.

3. What was the standard "grace period" provided by the ALJ before starting the record on the day of the hearing? Answer: A 15-minute grace period is typically provided for parties to arrive.

4. Why did the Petitioner claim they would not be attending the April 6 hearing? Answer: The Petitioner stated via email to the Respondent's counsel that they did not believe the Office of Administrative Hearings had jurisdiction over the matter.

5. What is the OAH's "inside policy" regarding the time allowed for a party to explain a missed hearing before a case is vacated? Answer: The office allows 48 hours (two business days) for a party to provide "good cause" for missing a hearing.

6. What was the specific outcome of the Petitioner’s request for a stay in Superior Court? Answer: The Superior Court denied the request for a stay.

7. According to the Respondent’s counsel, what was the subject of the records request that led to the petition? Answer: The petition concerned records related to the association’s 2025 annual meeting.

8. What was the result of a previous, similar petition filed by the same Petitioner regarding the 2024 annual meeting? Answer: The association prevailed in the previous case, proving it had complied with the law.

Section 3: Essay Prompts for Deeper Exploration

1. The Implications of Non-Appearance in Administrative Law Analyze the consequences of a petitioner failing to appear at a scheduled administrative hearing. In your essay, reference ARIZ. ADMIN. CODE R2-19-119 and discuss how the "burden of proof" shifts or fails when a party is absent. Explain why the ALJ in this case dismissed the complaint rather than ruling on the merits of the evidence provided by the Respondent.

2. Jurisdictional Conflicts: Administrative Agencies vs. Superior Court The Petitioner in this case challenged the jurisdiction of the OAH while simultaneously seeking relief in Superior Court. Discuss the procedural "twist" created by the Petitioner's special action. What are the legal risks of ignoring an administrative hearing based on a personal belief that the agency lacks jurisdiction, especially after a Superior Court has denied a stay?

3. The Role of Stipulation and Continuance in Legal Proceedings Examine the interactions between Attorney Chad Gallacher and the Petitioner regarding the proposed stipulation to continue the hearing. Discuss the importance of mutual agreement (stipulation) in managing court calendars and how the Petitioner's refusal to stipulate influenced the ALJ's final decision to dismiss the case.

Section 4: Glossary of Important Terms

  • Administrative Law Judge (ALJ): An official who presides over federal or state administrative proceedings, acting as both trier of fact and law.
  • Burden of Proof: The obligation of a party (in this case, the Petitioner) to provide sufficient evidence to support their claim.
  • Continuance: The postponement of a legal proceeding to a later date.
  • Dismissal: A court order that concludes a lawsuit or complaint without a full trial or further hearing.
  • Good Cause: A legally sufficient reason for a failure to perform a required act, such as missing a scheduled hearing.
  • Jurisdiction: The legal authority of a court or agency to hear and decide a case.
  • Petitioner: The party who presents a petition to a court or administrative body to initiate a case.
  • Respondent: The party against whom a petition is filed.
  • Special Action: A legal proceeding used to seek extraordinary relief from a court, often used to challenge the actions of lower tribunals or agencies.
  • Stipulate: To come to an agreement between parties or their attorneys regarding a specific aspect of legal proceedings.
  • Vacate: To cancel or render void a scheduled event or a previous legal judgment.
  • With/Without Prejudice: A dismissal "with prejudice" means the case cannot be brought again; "without prejudice" (as discussed by the ALJ) typically allows for the possibility of the matter being revisited.

The No-Show Settlement: Inside the Dismissal of AZNH Revocable Trust v. Sunland Springs Village HOA

1. Introduction: A Quiet Day in Court

On the afternoon of April 6, 2026, the hearing room at the Office of Administrative Hearings (OAH) in Phoenix was remarkably still. Typically, the lower level of the West Adams Street building hums with the tension of legal disputes, but the matter of AZNH Revocable Trust v. Sunland Springs Village Homeowners Association was destined for a different kind of resolution.

The case, brought by trustees John and Susan Sullivan against their community’s association, was set for a high-stakes evidentiary hearing. Yet, the anticipated confrontation over association records never began. In a surprising turn of events, the Petitioner failed to appear, leading to a swift dismissal that underscores a hard truth in administrative law: the most important part of your case is simply showing up.

2. Case Background: The Road to the Hearing

This dispute was not a fresh disagreement between neighbors. In fact, it was the second time the Petitioner had filed a complaint regarding this specific issue. According to statements made during the proceedings, the parties had previously litigated the association’s 2024 annual meeting—a case the association won. This latest referral, sent to the OAH by the Arizona Department of Real Estate (Department) on January 14, 2026, concerned the 2025 annual meeting and a similar set of records requests.

The procedural path began with a Department Notice of Hearing on January 30, 2026, which originally scheduled the matter for March 6. However, on February 18, 2026, Administrative Law Judge Nicole Robinson granted a continuance requested by the Petitioner, resetting the in-person hearing for April 6, 2026, at 1:00 PM. Despite having successfully moved the date, the Petitioner’s ultimate absence would bring the case to a grinding halt.

3. The Jurisdictional Dispute: A Procedural "Odd Twist"

The Petitioner's absence was not an oversight, but rather the result of what attorney Chad Gallacher described as an "odd procedural twist." The Petitioner had filed a "Special Action" in Superior Court, arguing that the OAH lacked the jurisdiction to hear the matter.

In a gamble that ultimately failed, the Petitioner requested that the Superior Court stay (pause) the OAH proceedings. The Superior Court denied that request, instructing the parties to either proceed with the hearing or stipulate to a continuance. Mr. Gallacher, representing the Sunland Springs Village HOA, detailed his efforts to coordinate with the Petitioner:

"Petitioner filed a special action in superior court trying to essentially strike the association’s response… he asked in superior court the superior court stay today’s hearing and the superior court denied that request… I sent a follow-up email confirming hey I am putting in writing I am willing to stipulate to continue the hearing if you would like to do that. He responded and said that his position is that he doesn’t think the office of administrative hearings has jurisdiction… the judge [in Superior Court] disagrees and she basically instructed us to stipulate to continue if we wanted to continue… he again simply reiterated no I won’t be stipulating to continue."

By refusing to agree to a continuance while simultaneously boycotting the hearing on jurisdictional grounds, the Petitioner entered a procedural stalemate without a safety net.

4. April 6, 2026: Timeline of a Dismissal

The OAH operates with a specific set of protocols for late or absent parties. When 1:00 PM arrived with no sign of the Sullivans, Judge Robinson implemented the court’s standard waiting period.

Timeline of Events:

  • 1:00 PM: The scheduled start time for the in-person hearing.
  • 1:00 PM – 1:15 PM (The 15-Minute Grace Period): Per OAH policy, the court allows a fifteen-minute window for parties to arrive before officially convening the record. This grace period ensures that minor delays, such as traffic or security lines, do not result in immediate default.
  • 1:18 PM: Judge Nicole Robinson officially goes on the record. She identifies the Respondent’s representatives: Attorney Chad Gallacher and Kathy Fowlers, the community manager and client representative.
  • 1:25 PM: After confirming that the Petitioner had not called, emailed, or filed any motion to appear virtually, Judge Robinson noted the time and concluded the recording.

5. The Final Ruling: Why the Case Was Dismissed

While the hearing ended on Monday, April 6, the formal order was not signed until Thursday, April 9, 2026. This three-day gap was a result of the OAH’s "inside policy" of waiting 48 hours (two business days) before officially vacating a case. This "wait-and-see" window allows an absent party to potentially provide a "good cause" explanation for their disappearance.

No such explanation arrived. Consequently, Judge Robinson’s decision rested on two critical legal pillars:

  • Notice Requirements: Under ARIZ. REV. STAT. §§ 41-1092.04 and 41-1061(A), the court found the notice provided by the Department and the OAH via mail and email to be "reasonable." The Petitioner was legally deemed to have received notice of the hearing they missed.
  • Burden of Proof: Under ARIZ. ADMIN. CODE R2-19-119, the party bringing a complaint—the Petitioner—carries the burden of presenting evidence. By failing to show up, the Petitioner failed to meet this burden.

The result was a final, clear-cut Order: The complaint is DISMISSED.

6. Key Takeaways for Homeowners and Associations

This case provides several vital lessons for those navigating the administrative legal system:

  1. Administrative Authority is Binding: Questioning jurisdiction is a legitimate legal move, but it does not grant a party the right to ignore a scheduled hearing. Judge Robinson noted that in these Department of Real Estate matters, OAH decisions are final.
  2. The Importance of Appearance: Administrative hearings are mandatory. Unless a stay is granted by a higher court, failure to appear typically results in an automatic loss.
  3. The "Good Cause" Window is Short: The OAH's 48-hour policy offers a slim margin for emergency explanations, but it is not a substitute for a formal continuance.
  4. Repeat Litigation has Consequences: As the Respondent noted, having already successfully defended the 2024 meeting records, the association was prepared with a comprehensive defense. Consistency in following the law is an association's best shield.

Parties wishing to challenge such a dismissal have 30 days from the service of the order to file a request for a rehearing with the Commissioner of the Department of Real Estate, as per ARIZ. REV. STAT. § 32-2199.04.

7. Conclusion

The dismissal of AZNH Revocable Trust v. Sunland Springs Village HOA serves as a stark reminder of the rigidity of procedural rules. The Petitioner chose to stake their case on a jurisdictional theory that had already failed to move the Superior Court. By failing to appear in the Phoenix courtroom on April 6, they effectively silenced their own complaint. The final order signed by Judge Nicole Robinson on April 9, 2026, brings a quiet, administrative end to a dispute that never managed to speak for itself.

Case Participants

Petitioner Side

  • John Sullivan (Trustee)
    AZNH Revocable Trust
    Did not appear at the April 6, 2026 hearing.
  • Susan Sullivan (Trustee)
    AZNH Revocable Trust
    Did not appear at the April 6, 2026 hearing.

Respondent Side

  • Chad M. Gallacher (Attorney)
    Maxwell & Morgan, P.C.
    Appeared at the hearing on behalf of the respondent. Also referred to as Chad Gallagher in transcripts and decision texts.
  • Kathy Bowers (Community Manager / Witness)
    Sunland Springs Village Homeowners Association
    Appeared at the hearing as a client representative. Referred to as Kathy Fowlers in the Administrative Law Judge Decision.

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over the hearing and issued the decision to dismiss the complaint.
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
    Copied on transmittals for the orders and decision.

Aracelys M Morel

Posted on by

Case Summary

Case ID 25F-H116-REL
Agency —
Tribunal —
Decision Date 2026-03-26
Administrative Law Judge NR
Outcome Petition DENIED
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Aracelys M Morel Counsel —
Respondent Northwood Park Homeowners Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H116-REL Decision – 1398198.pdf

Uploaded 2026-04-24T12:56:14 (44.6 KB)

25F-H116-REL Decision – 1408877.pdf

Uploaded 2026-04-24T12:56:20 (144.5 KB)

Legal Briefing: Morel v. Northwood Park Homeowners Association

Executive Summary

The case of Aracelys M. Morel v. Northwood Park Homeowners Association (No. 25F-H116-REL) centered on a dispute regarding the classification of short-term rental guests under Arizona law. The Petitioner, a homeowner within the Northwood Park community, challenged the Association’s practice of charging a $25 administrative fee for every Airbnb stay, arguing that short-term guests do not constitute "tenants" as defined by state statutes or the Association's Covenants, Conditions, and Restrictions (CC&Rs).

Following an evidentiary hearing held on February 20, 2026, Administrative Law Judge (ALJ) Nicole Robinson issued a decision on March 26, 2026, denying the petition. The ruling established that under Arizona law—specifically A.R.S. § 33-1806.01—short-term rental guests meet the legal definition of "tenants" because the statute lacks a durational requirement. Consequently, the Association is legally authorized to charge a $25 fee for each new tenancy, regardless of the stay's length.

Detailed Analysis of Key Themes

1. Statutory Interpretation of "Tenant"

The core of the dispute was the definition of a "tenant." The Petitioner contended that Airbnb guests function more like hotel guests and lack the long-term residency rights typically associated with a "tenant." Conversely, the Association argued that the term should be interpreted through the lens of the Arizona Residential Landlord and Tenant Act.

The ALJ adopted the definition found in A.R.S. § 33-1310(17), which defines a tenant as "a person entitled under a rental agreement to occupy a dwelling unit to the exclusion of others." Because an Airbnb reservation constitutes an agreement for exclusive occupancy, the court ruled that these guests are legally tenants.

2. Lack of Durational Requirement

A significant theme in the hearing was whether the length of a stay impacts the classification of tenancy. The Petitioner argued that one- or two-night stays should not be subjected to the same administrative fees as long-term leases. However, the Association successfully argued, and the ALJ confirmed, that Arizona law does not specify a minimum duration for a tenancy to exist. This interpretation allows HOAs to apply "per-stay" fees even for very short durations.

3. Conflict Between HOA Authority and Platform Privacy

The Petitioner highlighted a practical conflict: the Association requires specific guest information (names, vehicle descriptions, and license plate numbers), while the Airbnb platform restricts the amount of personal data shared with hosts for privacy reasons. The Petitioner testified that she only receives the guest's name and the duration of the stay. Despite this, the ALJ ruled that the Association’s demand for this information was consistent with the requirements of A.R.S. § 33-1806.01(C).

4. Evidentiary and Procedural Challenges

The Petitioner challenged the validity of five "Courtesy Notices" and violation letters issued by the Association, alleging they were based on "suppositions" rather than verified inspections. She claimed some notices were sent for dates when the unit was unoccupied. However, the ALJ found that the Petitioner failed to meet the burden of proof required to show that the Association had violated the law or its governing documents.

Important Quotes with Context

On the Nature of Airbnb Guests

"Because the PD [guests] of Airbnb are not tenants, there is no contract, there is no lease, they do not acquire rights like a long-term civil [tenant]… they function as a hotel." — Aracelys M. Morel, Petitioner

Context: During her testimony, the Petitioner argued that the lack of a traditional lease agreement meant her guests should be exempt from the $25 fee.

On the Definition of Tenancy

"If there was meant to be a durational requirement to determine tenancy for the purposes of the statute, then it would be included in the statute." — Respondent Counsel (Jeffrey McLerran/Neil Berglund)

Context: The Association’s legal team argued that the absence of a time limit in the law means a "new tenancy" occurs every time a new guest checks in, regardless of how long they stay.

On the Association's Right to Information

"In accordance with ARIZ. REV. STAT. § 33-1806.01(c), please provide the names and contact information for all adult tenants occupying the property, the time period of the lease… and a description of and the license plate number for all tenant’s vehicles." — September 8, 2025, Courtesy Notice

Context: This quote from the original violation notice outlines the specific data the HOA is legally permitted to collect from homeowners who rent their units.

The Final Ruling

"Hence, the definitions of 'rental agreement' and 'tenant' provided in ARIZ. REV. STAT. § 33-1310, clearly define the Airbnb guests, especially, because the Arizona law speaks to no durational requirement." — Judge Nicole Robinson, ALJ Decision

Context: This was the critical legal conclusion that led to the denial of the petition and the affirmation of the Association's fee structure.

Summary of Statutory Authority (A.R.S. § 33-1806.01)

The following table outlines the key provisions of the statute used to decide the case:

Provision Description
Subsection A Members may use property as a rental unless prohibited by the declaration.
Subsection C HOAs may only require: Name/contact of adult occupants, lease time period, and vehicle descriptions/license plates.
Subsection D HOAs may charge a fee of not more than $25.00 for each new tenancy. Renewals cannot be charged.
Subsection E(4) HOAs may not charge more than $15.00 as a penalty for late or incomplete information.

Actionable Insights

  • Fee Cumulative Impact: Homeowners operating short-term rentals in Arizona HOAs should be prepared for significant administrative costs. Since the $25 fee applies to each new tenancy, a host with ten bookings in a month could owe the Association $250 in administrative fees in addition to regular assessments.
  • Mandatory Data Collection: To avoid fines (which are capped at $15 for incomplete information), hosts must find a way to collect guest vehicle information and license plate numbers, even if the booking platform does not automatically provide them.
  • CC&R Limitations: While many homeowners believe the Association must have specific language in their CC&Rs to regulate short-term rentals, this case demonstrates that state law (A.R.S. § 33-1806.01) provides a default authority that the Association can exercise even if the CC&Rs are silent.
  • Appeals Process: Homeowners who receive violation notices have the right to appeal to the Board of Directors within the timeframe specified in the notice (often 21 days). However, challenging the state's definition of "tenant" in a short-term context is unlikely to succeed given this precedent.

Case Analysis Study Guide: Aracelys M. Morel v. Northwood Park Homeowners Association

This study guide provides a comprehensive overview of the legal proceedings and final decision in the matter of Aracelys M. Morel v. Northwood Park Homeowners Association (Case No. 25F-H116-REL). It synthesizes the core legal arguments, statutory interpretations, and factual findings regarding the regulation of short-term rentals within planned communities in Arizona.

Core Case Overview

The dispute centered on whether a Homeowners Association (HOA) could legally charge a recurring $25 administrative fee for every short-term rental stay (Airbnb) under Arizona law.

Key Parties
  • Petitioner: Aracelys M. Morel, a homeowner in the Northwood Park community.
  • Respondent: Northwood Park Homeowners Association, represented by Freeman Mathis & Gary, LLP.
  • Adjudicator: Administrative Law Judge (ALJ) Nicole Robinson of the Office of Administrative Hearings (OAH).
Primary Legal Issue

The Petitioner challenged the Respondent’s interpretation of A.R.S. § 33-1806.01. The central question was whether short-term Airbnb guests qualify as "tenants," thereby allowing the HOA to charge a $25 fee for "each new tenancy."

Statutory Framework and Legal Arguments

Relevant Statutes
Statute Description
A.R.S. § 33-1806.01(C) Limits the information an HOA can require regarding a tenant to: names/contact info of adults, lease time period, and vehicle descriptions/license plates.
A.R.S. § 33-1806.01(D) Authorizes an HOA to charge a fee of no more than $25 for each "new tenancy" to process the disclosures required in subsection C.
A.R.S. § 33-1310(17) Defines "Tenant" as a person entitled under a rental agreement to occupy a dwelling unit to the exclusion of others.
A.R.S. § 33-1310(13) Defines "Rental Agreement" as all agreements (written, oral, or implied) concerning the use and occupancy of a dwelling unit.
Arguments of the Petitioner
  • Definition of Tenancy: Argued that Airbnb guests are "guests" or "short-term guests" rather than "tenants."
  • Lack of Contract: Asserted that no formal lease or landlord-tenant contract exists in Airbnb transactions.
  • Fee Application: Contended that the $25 fee should be a one-time administrative charge rather than a repetitive fee for every weekend stay.
  • Privacy and Feasibility: Claimed that Airbnb's privacy standards prevent hosts from obtaining all the information (such as license plate numbers) required by the HOA.
Arguments of the Respondent
  • Exclusive Possession: Argued that because Airbnb guests have the right to occupy the unit to the exclusion of others during their stay, they meet the legal definition of a tenant.
  • No Durational Requirement: Asserted that Arizona law does not specify a minimum length of stay to establish a "tenancy."
  • Statutory Authority: Maintained that A.R.S. § 33-1806.01(D) explicitly allows for the $25 fee for "each new tenancy."

Factual Findings and Final Decision

Judge Nicole Robinson issued the final decision on March 26, 2026. The petition was denied based on the following findings:

  1. Burden of Proof: The Petitioner failed to prove by a preponderance of the evidence that the HOA violated the law.
  2. Broad Definition of Tenant: The ALJ applied the definitions found in the Arizona Residential Landlord and Tenant Act. Because Airbnb guests occupy the unit to the exclusion of others under an agreement, they are legally considered "tenants."
  3. Durational Absence: The ALJ noted that Arizona law contains no "durational requirement" to distinguish between a short-term guest and a tenant.
  4. HOA Authority: In the absence of specific community CC&R provisions regarding short-term rental fees, the Arizona state statute serves as the guiding authority. Consequently, the Association is permitted to charge $25 for each new Airbnb guest stay.

Short-Answer Practice Questions

  1. What is the maximum fee an HOA can charge for processing tenant information under A.R.S. § 33-1806.01(D)?
  • Answer: Twenty-five dollars ($25.00).
  1. According to the ALJ, what is the primary factor that classifies an Airbnb guest as a "tenant"?
  • Answer: The guest's entitlement under an agreement to occupy a dwelling unit to the exclusion of others.
  1. Does Arizona law require a minimum length of stay (e.g., 30 days) to define a "tenancy"?
  • Answer: No; the ALJ determined there is no durational requirement in the statute.
  1. What information is an HOA permitted to request regarding a tenant under A.R.S. § 33-1806.01(C)?
  • Answer: Name and contact info for all adults, the time period of the lease (start and end dates), and a description and license plate numbers of the tenants' vehicles.
  1. What was the final outcome of Case No. 25F-H116-REL?
  • Answer: The petition was denied, and the ALJ ruled that the HOA was permitted to charge the $25 fee for each new guest stay.

Essay Prompts for Deeper Exploration

  1. The Intersection of Privacy and Regulation: Analyze the Petitioner’s argument regarding Airbnb's privacy standards versus the HOA's statutory right to information. How should a property owner balance third-party platform privacy policies with state-mandated disclosure requirements?
  2. Statutory Interpretation and Duration: Discuss the implications of the ALJ’s ruling that "tenancy" has no durational requirement in Arizona. How does this interpretation affect the distinction between residential rentals and lodging/hospitality (hotels)?
  3. The Role of Governing Documents: The ALJ noted that Northwood Park’s CC&Rs did not specifically address short-term rental fees, leading to the reliance on state statutes. Evaluate the importance of specific HOA governing documents in preempting or clarifying state-level statutory authorities.

Glossary of Important Terms

  • Administrative Law Judge (ALJ): A judge who over-sees evidentiary hearings and issues decisions for state agencies, such as the Office of Administrative Hearings.
  • A.R.S. (Arizona Revised Statutes): The codified laws of the state of Arizona.
  • CC&Rs (Covenants, Conditions, and Restrictions): The governing documents that dictate the rules and limitations of a planned community or HOA.
  • Courtesy Notice: An initial warning sent to a homeowner regarding a potential violation before formal fines are levied.
  • Exclusion of Others: A legal standard indicating that a tenant has sole possession and control of a property during the term of their agreement.
  • Petitioner: The party who initiates a legal action or petition (in this case, Aracelys Morel).
  • Preponderance of the Evidence: The legal standard of proof in civil cases, meaning a fact is "more probable than not."
  • Respondent: The party against whom a legal action or petition is filed (in this case, Northwood Park HOA).
  • Tenancy: The possession or occupancy of lands or buildings by lease or agreement.

The $25 Stay: Are Your Airbnb Guests "Tenants" Under Arizona Law?

1. Introduction: The Clash Between Short-Term Rentals and HOA Fees

The meteoric rise of the short-term rental (STR) economy has forced a legal collision between the property rights of individual hosts and the regulatory reach of Homeowners Associations (HOAs). While hosts often categorize their clients as "guests" or "transient visitors," HOAs are increasingly turning to state statutes to reclassify these occupants and monetize the administrative oversight they require.

The recent case of Morel v. Northwood Park Homeowners Association (Case No. 25F-H116-REL) serves as a definitive case study in this conflict. The dispute centers on a critical question of statutory interpretation: Does a short-term booking constitute a "new tenancy" under Arizona law, thereby authorizing an HOA to levy an administrative fee for every single stay?

2. The Case Study: Morel vs. Northwood Park HOA

Aracelys M. Morel, the Petitioner, has owned a 1,125-square-foot, two-bedroom townhouse (Unit 101) within the Northwood Park community in Mesa for approximately six years. In November 2024, Morel transitioned the property from her primary residence to a short-term rental.

The "trigger event" for the HOA’s investigation was a matter of residency logistics. Although Morel owned Unit 101, she moved into Unit 82 within the same community. This "offsite address" alerted the Association that Unit 101 was no longer owner-occupied. In September 2025, the HOA issued a "Courtesy Notice" citing A.R.S. § 33-1806.01(C), demanding specific tenant disclosures—names of all adults, stay dates, and vehicle license plate numbers—accompanied by a $25 administrative fee per stay.

Morel filed a preemptive legal challenge, seeking a determination that her Airbnb guests were not "tenants" and that the HOA had no authority to charge repetitive fees. Notably, at the time of the hearing, Morel had not yet been charged nor paid the fees; the case was a strategic attempt to block the HOA's interpretation of the law before the administrative levies accumulated.

3. The "Tenant vs. Guest" Debate: Two Sides of the Argument
Petitioner's Position (Morel) Respondent's Position (HOA)
Occupancy Status: Airbnb users are "short-term visitors" or "guests," not traditional tenants with long-term rights. Cross-Statutory Definition: Under the Arizona Residential Landlord and Tenant Act (§ 33-1310), a tenant is defined by the right to exclusive occupancy.
Lack of Formal Lease: No traditional lease agreement exists; the booking is a platform-based transaction. Possessory Interest: Arizona law contains no "durational requirement" to qualify as a tenancy; a 24-hour stay meets the legal threshold.
Monetization Limit: Fees should be a one-time administrative cost for the property, not a recurring levy for every booking. Statutory Authority: A.R.S. § 33-1806.01(D) explicitly authorizes a $25 fee for "each new tenancy" regardless of duration.
Governing Documents: The community's CC&Rs do not explicitly authorize or regulate fees for short-term rentals. Statutory Supremacy: The HOA relies on state law, which applies "notwithstanding any provision in the community documents."
4. Decoding the Law: A.R.S. § 33-1806.01

The dispute hinges on the "statutory silence" within the HOA-specific statutes regarding the definition of a tenant. However, the authority to charge is explicitly granted in A.R.S. § 33-1806.01(D):

"Notwithstanding any provision in the community documents… the association may charge a fee of not more than twenty-five dollars… The fee may be charged for each new tenancy for that property but may not be charged for a renewal of a lease."

The statute empowers HOAs to require the following disclosures for each tenancy:

  • Names and contact information for all adult occupants.
  • The specific time period of the lease (start and end dates).
  • Descriptions and license plate numbers of the tenants' vehicles.

Furthermore, the law provides a two-tiered monetization strategy. Beyond the $25 administrative fee, the HOA can impose a penalty of up to $15 for "incomplete or late information" regarding these disclosures.

5. The Judge’s Verdict: Why the HOA Won

Administrative Law Judge (ALJ) Nicole Robinson denied Morel’s petition, confirming the HOA’s right to treat short-term stays as tenancies. The ruling rested on a critical "legal bridge": because the HOA statute (§ 33-1806.01) does not define "tenant," the court performed a cross-statutory interpretation using the Arizona Residential Landlord and Tenant Act.

The ALJ’s reasoning centered on three factors:

  • Exclusive Occupancy (Possessory Interest): Under A.R.S. § 33-1310, a tenant is one entitled to occupy a dwelling "to the exclusion of others." The ALJ ruled that Airbnb guests hold this right during their stay, making them legal tenants.
  • Lack of Durational Requirement: The court explicitly noted that Arizona law does not specify a minimum length of stay. A "tenancy" can legally exist for a single night.
  • Failure of the "Privacy Defense": Morel argued she could not provide guest data because of Airbnb’s privacy policies. The ALJ dismissed this, noting that Morel provided no persuasive policy from Airbnb that overrode state statutory disclosure requirements.
6. Practical Takeaways for Arizona Homeowners and Hosts

The Morel decision creates a significant compliance burden for STR hosts within Arizona HOAs.

  1. "Tenant" is a Functional Definition: In Arizona, "Tenant" is defined by the right to occupy, not the length of time. If a guest can lock the door and exclude the owner, they are a tenant under this ruling.
  2. The Compliance Burden: Hosts are legally responsible for collecting data points—specifically vehicle license plates—that Airbnb may not traditionally provide. The "Airbnb Privacy Defense" is not a valid legal shield against an HOA’s statutory request.
  3. Monetization is Cumulative: HOAs can effectively tax high-turnover rentals. A property with ten weekend bookings in a month could face $250 in administrative fees, plus potential $15 "late fees" if disclosures are not provided within the 15-day window prescribed by the HOA.
  4. Statutory Supremacy Over CC&Rs: The phrase "Notwithstanding any provision in the community documents" means HOAs do not need to amend their CC&Rs or seek a community vote to begin charging these fees. They can rely directly on state law.
7. Conclusion: The Future of Short-Term Rental Governance

The denial of the petition in Morel v. Northwood Park HOA establishes a powerful precedent for HOA boards across Arizona. It confirms that the administrative burden of tracking transient occupants can be passed directly to the homeowner as a recurring cost. For the STR market, this ruling effectively bypasses the need for community-wide votes to regulate rentals, allowing HOAs to utilize state statutes to monetize and manage the impact of short-term stays within their communities.

8. Document Reference Section
  • Petitioner: Aracelys M. Morel
  • Respondent: Northwood Park Homeowners Association
  • Administrative Law Judge: Nicole Robinson
  • Case Number: 25F-H116-REL
  • Statutes Cited: A.R.S. § 33-1806.01; A.R.S. § 33-1310

Case Participants

Petitioner Side

  • Aracelys M Morel (Petitioner)
    Appeared on her own behalf

Respondent Side

  • Neil Berglund (Attorney)
    Freeman Mathis & Gary, LLP
    Represented Northwood Park Homeowners Association
  • Jeffrey McLerran (Attorney)
    Freeman Mathis & Gary, LLP
    Represented Northwood Park Homeowners Association

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Assigned judge for the hearing
  • Luigui Melenciano (Spanish Interpreter)
    Language Connect
    Interpreted for the hearing
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
    Served as ADRE Commissioner

Other Participants

  • Lynn Sharp (Observer)
    Listed as an observer

Antoinette McCarthy v. Wild Turkey Townhouse Association

Posted on by

Case Summary

Case ID 25F-H114-REL
Agency Arizona Department of Real Estate
Tribunal —
Decision Date 2026-03-19
Administrative Law Judge ADS
Outcome Petition granted
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Antoinette McCarthy Counsel Pro Se
Respondent Wild Turkey Townhouse Association Counsel Charles D. Onofry

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H114-REL Decision – 1395836.pdf

Uploaded 2026-04-24T12:55:57 (62.2 KB)

25F-H114-REL Decision – 1406436.pdf

Uploaded 2026-04-24T12:56:01 (102.6 KB)

Briefing Document: McCarthy v. Wild Turkey Townhouse Association (No. 25F-H114-REL)

Executive Summary

This briefing document analyzes the administrative hearing and subsequent decision regarding a dispute between Antoinette McCarthy (Petitioner) and the Wild Turkey Townhouse Association (Respondent). The central conflict involved the Association Board’s decision to initiate a $3,356,596 roofing project and impose individual special assessments of approximately $20,000 per unit without obtaining a 66% membership ratification vote.

On March 19, 2026, Administrative Law Judge (ALJ) Adam D. Stone ruled in favor of the Petitioner. The tribunal determined that while the Association is authorized to "replace" roofs, the inclusion of significant system upgrades—such as new ventilation, thermal insulation, and structural modifications—constituted "alterations" under the Association’s Covenants, Conditions, and Restrictions (CC&Rs). Consequently, the Board exceeded its authority by bypassing the mandatory membership vote required for such improvements. The Association was ordered to comply with the CC&Rs and reimburse the Petitioner’s filing fee.

Detailed Analysis of Key Themes

1. Interpretation of "Replacement" vs. "Alteration"

The core of the legal dispute rested on the distinction between maintenance and improvement.

  • The Association's Stance: The Board argued that Article VI of the CC&Rs granted them the authority to "paint, repair, replace and care for roofs" as part of their maintenance duties. They contended that modernizing roofs to current building standards (after 40 years) was a logical extension of the power to "replace."
  • The Petitioner's Stance: McCarthy argued that the project was not a "like-for-like" replacement. She presented evidence from the Association’s own roofing assessment (Recorp) showing the addition of entirely new systems:
  • Ventilation: The installation of balanced ventilation systems where none previously existed.
  • Insulation: The addition of four inches of R25 insulation.
  • Structural/Mechanical Changes: The necessity of raising HVAC units and extending plumbing penetrations to accommodate the increased roof height.
  • Judicial Finding: The ALJ agreed with the Petitioner, stating that while "replace" does not strictly mean "like-for-like," the project included "costly additions/upgrades" that transformed the scope from maintenance into "alterations and improvements" governed by Article VIII.
2. Financial Governance and Special Assessments

The Association implemented a complex financial structure to fund the $3.3 million project:

  • Cost Splitting: The Board determined a 65/35 split, where individual owners bore 65% of the cost and the Association's reserves covered 35%.
  • The 5% Escalator: Because the project was scheduled in three phases over three years, a 5% annual cost escalator was added to the assessments. Finance Chair Daniel Meyers testified this was intended to ensure fairness so that owners in later phases would not pay significantly more due to rising material costs.
  • True-Up Process: The Association issued "estimated" assessments of $20,000 per unit, with the intention of performing a "true-up" (adjusting the bill up or down) after completion, based on the specific needs of each unit (e.g., skylights).
3. Board Authority and Membership Rights

The proceedings highlighted a breakdown in communication and perceived transparency:

  • Lack of Vote: Chrystalyn Lash (HOAMCO) and Daniel Meyers confirmed that no membership vote was held. They relied on legal counsel's interpretation that because the roofs benefited individual units rather than common areas, the specific voting requirements of Article VIII, Section 4 did not apply.
  • Member Exclusion: Witnesses Rosa Vangrieken and Fred Grove expressed frustration that the roofing committee was cancelled or that member input was disregarded. Vangrieken testified to the personal financial strain caused by the $20,000 assessment, which required her to secure a private loan at 6.5% interest.

Important Quotes with Context

On the Nature of the Upgrades

"During the re-roofing phase, insulation would need to be installed above the decking to achieve an R25 insulation value… The height of the new roofs would require the HVAC units to be raised and extended."

— Antoinette McCarthy, quoting the Recorp Roofing Assessment to demonstrate that the project involved mechanical and structural redesign rather than simple maintenance.

On Financial Fairness and the Escalator

"One of the concerns is that the people that are going to be paying in the third phase are going to be paying a higher amount than the people in the first phase… we provided that 5% across everybody's cost and then shared it."

— Daniel Meyers, Finance Chair, explaining the rationale behind the 5% cost escalator that McCarthy challenged as unauthorized.

On the Responsibility for Costs

"The maintenance of the roof is the responsibility of the HOA… The HOA is responsible for paying for it, not individual homeowners, but the association. And if there's no money there, it was quite clear a special assessment would be required."

— Fred Grove, Witness and former Board Member, arguing that the Board's 65/35 cost-splitting model contradicted historical and CC&R-based understandings of Association duties.

On the Board's Reliance on Counsel

"I based my assessment on seeing what the attorneys… who we hired to review the CCNRs… recommended. That is my understanding that that was their recommendation that we did not need that [vote] based on their interpretation."

— Daniel Meyers, acknowledging that the decision to bypass the membership vote was based on legal advice rather than a direct mandate from the community.

The Judicial Ruling

"Because of the complicated nature of the project and the calculations required, the matter should have been brought to a vote by the members of the Association."

— Administrative Law Judge Adam D. Stone, in his Final Decision, concluding that the Board failed to follow the procedural requirements for significant capital improvements.

Key Data Points and Facts

Category Detail
Case Number 25F-H114-REL
Location Wild Turkey Townhomes, Sedona, Arizona
Total Project Cost $3,356,596
Individual Assessment Approximately $20,000 per unit
Cost Allocation 65% Owner / 35% Association Reserve
Project Duration 3 years (Phased approach)
Total Units 122 Townhomes
Voting Requirement 66% of members present (for alterations/improvements)
Filing Fee Reimbursement $500.00 (Ordered by ALJ)

Actionable Insights

  • Distinguish Maintenance from Alteration: Association Boards must carefully evaluate whether "replacement" projects include new systems or structural changes. In this case, the addition of insulation and ventilation systems legally moved the project from "maintenance" to "alteration," triggering a higher threshold for approval.
  • Procedural Compliance is Mandatory: Even when acting on the advice of legal counsel, Boards must ensure they do not bypass the specific ratification votes required by their CC&Rs for large-scale improvements. Failure to do so can result in the invalidation of the assessment.
  • Transparency in Special Assessments: When implementing complex financial models like "cost escalators" and "true-ups," early and frequent membership engagement is necessary. The lack of a formal vote contributed to the perception that the Board exceeded its authority.
  • Reserve Fund Management: The dispute raised questions regarding the adequacy and use of reserve funds. Former Treasurer Lance Nelson noted a prior balance of $740,000, suggesting that long-term financial planning and clear reporting of reserve status are critical to avoiding sudden, massive special assessments that burden individual owners.

Study Guide: McCarthy v. Wild Turkey Townhouse Association (No. 25F-H114-REL)

This study guide provides a comprehensive overview of the administrative hearing and subsequent legal decision regarding the dispute between Antoinette McCarthy and the Wild Turkey Townhouse Association. It covers the core themes of homeowners' association (HOA) governance, the interpretation of Covenants, Conditions, and Restrictions (CC&Rs), and the limits of board authority in imposing special assessments.

I. Key Concepts and Case Overview

Central Conflict

The dispute centers on a $3,356,596 roofing project initiated by the Wild Turkey Townhouse Association. The Petitioner, Antoinette McCarthy, challenged a special assessment of approximately $20,000 per unit, arguing that the Board of Directors exceeded its authority by failing to obtain a mandatory 66% member approval for what she categorized as "alterations" rather than simple "replacements."

Governing Documents and Statutes
  • Article VI (Exterior Maintenance): Mandates that the Association maintain and replace roofs, gutters, and other exterior surfaces. It specifies that maintenance of individual townhouse units is the owner's obligation except for what the Association provides.
  • Article VIII, Section 4 (Special Assessments): Outlines the Board's power to levy assessments for specific costs. Crucially, it requires a three-fourths (3/4) Board vote and a 66% affirmative vote from members for "alterations, demolition, removal, construction or improvements" of recreational and other common facilities.
  • Arizona Revised Statutes (A.R.S.): Title 33, Chapter 16, Article 1 (Planned Communities) and §§ 32-2199.01 regarding the Department of Real Estate's authority to hear HOA disputes.
Arguments Presented
Party Core Argument Evidence/Rationale
Petitioner (McCarthy) The project constitutes an "alteration" requiring a membership vote. The project includes system redesigns: adding ventilation where none existed, increasing insulation to R25, raising HVAC units, and changing skylight types.
Respondent (HOA) The project is "maintenance/replacement" and does not require a vote. Article VI gives the Board the duty to replace roofs. They argued the 66% vote requirement in Article VIII only applies to common areas/recreational facilities, not individual roofs.
The "5% Escalator"

The Association included a 5% annual cost escalator in the assessment. The Finance Chair, Daniel Meyers, justified this because the project is phased over three years. The escalator was intended to distribute the risk of rising material and labor costs fairly across all owners, regardless of which year their roof was replaced.

II. Short-Answer Practice Questions

  1. What was the total estimated cost of the roofing project special assessment?
  2. According to the testimony of Chrystalyn Lash, what was the decided cost-sharing split between individual homeowners and the Association?
  3. Identify three specific technical upgrades McCarthy cited as evidence that the project was an "alteration" rather than a "replacement in kind."
  4. Under Article VIII, Section 4, what specific double-approval process is required for improvements or alterations?
  5. What was the Association's primary justification for not holding a membership vote?
  6. Who performed the roofing assessments used by the Board to justify the project?
  7. What was the Administrative Law Judge's (ALJ) final ruling regarding the necessity of a membership vote?
  8. What reimbursement did the ALJ order the Association to pay to the Petitioner?

III. Essay Prompts for Deeper Exploration

1. The Scope of "Replacement" vs. "Alteration"

In his decision, Judge Stone noted that "replace" does not necessarily mean "like-for-like," but it should not include "costly additions/upgrades." Analyze the tension between modern building codes (which may require upgrades like increased insulation) and historical CC&R language. At what point does a necessary repair transition into a project requiring membership ratification?

2. Equity in Phased Assessments

Discuss the ethical and legal implications of the "5% escalator" used by the Wild Turkey Townhouse Association. Was the Board's attempt to achieve "fairness" through an estimated escalator a valid exercise of fiduciary duty, or did it unfairly burden homeowners with speculative costs? Consider the testimony regarding fluctuating interest rates and material costs.

3. Board Authority and Member Oversight

The Association argued that since the roofs benefited individual units rather than common areas, the specific voting requirements for common area improvements did not apply. Contrast this with the Petitioner’s view that any major project altering the structure of the buildings falls under the spirit of Article VIII. Which interpretation better serves the stability of a planned community?

IV. Glossary of Important Terms

  • Administrative Law Judge (ALJ): A presiding officer (in this case, Adam D. Stone) who conducts hearings and issues decisions for state agencies like the Office of Administrative Hearings.
  • CC&Rs (Covenants, Conditions, and Restrictions): The legal documents that lay out the rules and guidelines for a planned community.
  • Cost Escalator: A clause in a contract or assessment (here 5%) that allows for an increase in prices based on future estimates of material or labor costs.
  • Exterior Maintenance: Tasks related to the upkeep of the outside of a building (roofs, siding, etc.) which, in this association, are handled by the HOA.
  • Preponderance of the Evidence: The legal burden of proof in civil and administrative cases, meaning that a claim is "more probably true than not."
  • Replacement in Kind: Replacing a building component with an identical or nearly identical version without changing the design or system.
  • Special Assessment: A one-time fee charged to HOA members to cover expenses not included in the regular budget (in this case, the $3.35M roofing project).
  • Statutory Agent: An individual or entity (like HOAMCO) designated to manage the affairs and receive legal documents on behalf of the association.
  • True-up Bill: A final adjustment or billing cycle conducted after a project's completion to reconcile estimated costs with actual expenses.

HOA Governance on Trial: The $3.3 Million Roofing Dispute in Sedona

1. Introduction: A Costly Conflict in the Village of Oak Creek

In the shadow of Sedona’s iconic red rocks, a legal battle recently unfolded that serves as a high-stakes cautionary tale for every HOA board in Arizona. At the Wild Turkey Townhouse Association in the Village of Oak Creek, what began as a necessary infrastructure project devolved into a $3,356,596 dispute that pitted homeowners against their leadership.

The conflict centered on a massive roofing initiative that imposed individual assessments of approximately $20,000 per homeowner. When resident Antoinette McCarthy challenged the project, the case moved to the Arizona Office of Administrative Hearings, forcing a deep dive into a question that keeps community managers awake at night: At what point does a "repair" or "replacement" become a structural "alteration" that requires a vote of the entire membership? For the Wild Turkey board, the answer would prove to be a million-dollar lesson in the limits of board discretion.

2. The Project Breakdown: Scope, Cost, and Controversy

The roofs at Wild Turkey were over 40 years old, and after assessments from Hails Roofing and project manager Recor, the board determined a full replacement was the only viable path forward. However, the sheer scale of the $3.3 million project necessitated a complex financial and logistical structure.

According to testimony from Community Manager Chrystalyn Lash and Finance Chair Daniel Meyers, the project featured several controversial pillars:

  • The 65/35 Cost Split: The board established a formula where individual homeowners were responsible for 65% of the cost, with the HOA covering the remaining 35% from the reserve fund.
  • The $20,000 Individual Assessment: Each owner was issued an assessment of roughly $20,000, which varied slightly based on roof square footage and specific unit needs (such as plywood replacement).
  • A Three-Year, Three-Phase Rollout: To manage cash flow and logistics, the 122-unit development was divided into three phases to be completed over three years.
  • The 5% Annual Cost Escalator: To ensure "fairness" so that Phase 3 owners didn't pay significantly more than Phase 1 owners due to inflation, the board added a 5% annual escalator to offset rising material and production costs.

3. Petitioner’s Argument: The Difference Between "Replace" and "Redesign"

Antoinette McCarthy’s petition was built on a fundamental distinction: the difference between maintenance and improvement. While Article VI of the CC&Rs gives the board the authority to "replace" roofs, McCarthy argued that the board used the project as a vehicle for a total system redesign. By adding components that never existed on the original townhomes, she contended the project moved out of the realm of maintenance and into "alterations," which require a 66% membership vote under Article VIII.

Maintenance vs. Alteration
CC&R Authorized Maintenance (Article VI) Actual Project Scope (Recor Assessment)
Paint, repair, and replace roofs Installation of new "balanced" ventilation systems where none existed
Provide exterior maintenance Addition of high-value R25 thermal insulation (approx. 4" thick)
"Replace and care for" roofs Raising structural height to accommodate insulation, requiring HVAC/plumbing extensions
Maintain gutters and downspouts Changing architectural profile from self-flashing to curb-mounted skylights

McCarthy’s evidence highlighted that the project wasn't just a new layer of shingles. It involved a structural shift—raising the roof height to fit R25 insulation—which in turn required extending mechanical systems like HVAC and plumbing. In the eyes of the petitioner, this was a redesign of the community’s architecture, not a simple repair.

4. The Board’s Defense: Discretion and Professional Interpretation

The Association’s defense rested on a specific, and ultimately risky, interpretation of Article VIII, Section 4. They argued that because the roofing work benefited individual lots rather than "common facilities," it fell under a provision where owners, by "accepting" the service, were "deemed to have agreed in writing" to the assessment.

Board witnesses emphasized that they were managing 122 individual townhome roofs that had reached the end of their functional life. They relied heavily on the advice of legal counsel, who suggested that modern building codes and the age of the structures necessitated these "upgrades" as part of a proper replacement. The board viewed the project as a necessary exercise of their fiduciary duty to maintain the property, believing they had the discretion to bypass a community-wide vote because the benefit was to the individual unit owners.

5. The Administrative Law Judge’s Decision

Administrative Law Judge Adam D. Stone issued a Final Decision on March 19, 2026, that served as a sharp rebuke to the board’s "discretionary" approach. While the Judge noted that a replacement does not have to be a "like-for-like" clone of the original, the inclusion of costly, brand-new systems—specifically the R25 insulation and ventilation—transformed the project into an "alteration."

The Judge focused on the complexity and the magnitude of the project, concluding:

"Because of the complicated nature of the project and the calculations required, the matter should have been brought to a vote by the members of the Association… the matter should have been brought to a 66% membership vote."

The Final Order:

  • Violation Confirmed: The Association was found to have violated the CC&Rs by failing to obtain the mandatory 66% member approval.
  • Compliance Mandate: The Association was ordered to follow the CC&Rs moving forward, effectively halting the board’s unilateral path.
  • Reimbursement: The Association was ordered to reimburse McCarthy’s $500 filing fee.

6. Community Voices: Testimony from the Hearing

The hearing brought to light the human cost of governance failures. Homeowner Rosa Vangrieken provided a sobering look at the financial impact, testifying that she was forced to take out a personal loan at a 6.5% interest rate to cover the $20,000 assessment. She expressed a sentiment common in such disputes: that the community was "dragged along" on a $3.5 million ride without a voice.

Perhaps most damaging to the board’s position was the testimony of Fred Grove. As a retired architect, general contractor, and former board member, Grove’s professional opinion carried significant weight. He described the situation as "unbelievable," noting that the process had "gotten so totally out of hand" and that the clear responsibility of the HOA under the CC&Rs was being mismanaged.

Adding to the tension was the testimony of Lance Nelson, a former board treasurer. Nelson raised a critical transparency issue, stating that two years prior, the reserve fund had a balance of $740,000. He testified that he had been unable to confirm the current balance because it was no longer published on the year-end Profit & Loss (P&L) statements—a lack of transparency that fueled homeowner distrust.

7. Conclusion & Key Takeaways for HOA Members

The Wild Turkey dispute is a stark reminder that even boards acting on the advice of legal counsel can find themselves on the wrong side of an administrative order. For this Sedona community, the $500 filing fee reimbursement was the least of the costs; the real damage lies in the legal fees, the fractured community trust, and the delay of a critical $3.3 million infrastructure project.

Lessons Learned for HOA Boards
  1. Scope Creep Requires Votes: "Maintenance" has limits. When you add new systems (like R25 insulation or ventilation) or change the structural profile of a building, you are likely performing an "alteration." When in doubt, the safer, more cost-effective path is always to seek membership ratification.
  2. Transparency is a Fiduciary Duty: The suspicion surrounding the $740,000 reserve fund highlights a best-practice failure. Boards must ensure that all financial balances, including reserves, are clearly published on year-end P&L statements. Silence breeds litigation.
  3. The "Narrow Branch of Authority": Boards do not have absolute power. Their authority is a "narrow branch" granted by the CC&Rs. Relying on an interpretation that bypasses the democratic process of the community—especially on a multi-million dollar project—is a recipe for a legal and financial disaster.

Ultimately, this case proves that the governing documents are not mere suggestions. Adhering to the specific voting requirements of your CC&Rs is not just a "best practice"—it is the only way to shield the association from the high cost of being overturned in court.

Case Participants

Petitioner Side

  • Antoinette McCarthy (Petitioner)
    Wild Turkey Townhouse Association
    Homeowner and Association member representing herself
  • Rosa Van Grieken (Witness)
    Association member who testified regarding the special assessment
  • Fred Grove (Witness)
    Wild Turkey Townhouse Association
    Former board member, retired architect, and general contractor

Respondent Side

  • Charles D. Onofry (Counsel)
    SCHNEIDER, ONOFRY & LOMELI, P.C.
    Attorney representing the respondent
  • Chrystalyn Lash (Witness)
    HOAMCO
    Community Association Manager for the association
  • Daniel Meyers (Witness)
    Wild Turkey Townhouse Association
    Finance Chair of the board

Neutral Parties

  • Adam D. Stone (Administrative Law Judge)
    Office of Administrative Hearings
    Presiding judge for the hearing
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
    Recipient of the transmitted decision

Barbara G Kunkel v. Agua Dulce Homeowner Association

Posted on by

Case Summary

Case ID 25F-H092-REL
Agency —
Tribunal —
Decision Date 2026-03-09
Administrative Law Judge NSK
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Barbara G Kunkel Counsel —
Respondent Agua Dulce Homeowner Association Counsel Sean K. Moynihan, Esq. (Smith & Wamsley PLLC)

Alleged Violations

No violations listed

Video Overview

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Decision Documents

25F-H092-REL Decision – 1377789.pdf

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25F-H092-REL Decision – 1402762.pdf

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Briefing Document: Kunkel v. Agua Dulce Homeowner Association (Case No. 25F-H092-REL)

Executive Summary

This briefing document analyzes the administrative dispute between Barbara G. Kunkel (Petitioner) and the Agua Dulce Homeowner Association (Respondent) regarding the statutory validity of a special recall meeting notice. The central conflict focused on whether a meeting notice metered on June 23, 2025, but postmarked on June 24, 2025, complied with the 10-day advance notice requirement for a meeting held on July 3, 2025.

The Petitioner contended that the postmark date should serve as the legal date of mailing, which would have resulted in only nine days of notice, thereby violating A.R.S. § 33-1804(B) and necessitating the automatic removal of the board under A.R.S. § 33-1813(D). The Respondent argued that "sent" refers to the date of deposit in the mail, which was confirmed by the private meter stamp.

The Office of Administrative Hearings (OAH) ruled in favor of the Respondent. The Administrative Law Judge (ALJ) determined that under United States Postal Service (USPS) regulations and local processing logistics, the notice was "sent" on June 23, 2025, making it timely under Arizona law.

Detailed Analysis of Key Themes

1. Statutory Notice and Computation of Time

The dispute is governed by Arizona Revised Statutes (A.R.S.) Title 33, which regulates planned communities. The primary legal standards applied in this case include:

  • A.R.S. § 33-1804(B): Requires that notice of a special meeting be sent via United States mail not fewer than 10 days nor more than 50 days in advance of the meeting.
  • A.R.S. § 1-243(A): Dictates the method for computing time, excluding the first day (the meeting date) and including the last day.
  • A.R.S. § 33-1813(D): Outlines the remedy for failure to properly call or notice a recall meeting, which the Petitioner argued should result in the automatic removal of the board.

For a meeting held on July 3, 2025, the 10th day counting backward (excluding July 3) is June 23, 2025. The core of the case rested on whether the notice was "sent" on June 23 or June 24.

2. "Sent" vs. "Postmarked"

A critical theme in the hearing was the interpretation of the word "sent" as used in A.R.S. § 33-1804(B).

  • Petitioner’s Position: Argued that the official USPS postmark is the only reliable evidence of mailing. Since the postmark was June 24, the Petitioner asserted the notice was late.
  • Respondent’s Position: Argued that "sent" means the deposit of the notice in the mail. They cited the USPS Domestic Mail Manual (DMM), stating that a private meter stamp must reflect the actual date of deposit. If the mail had been deposited on the 24th with a 23rd meter stamp, the USPS would not have processed it without a date correction.
  • ALJ Conclusion: The ALJ found that the statute only requires the notice to be "sent," not "postmarked." The evidence showed the notice was metered in Tucson on June 23.
3. USPS Logistics and Processing Realities

The decision leaned heavily on the technicalities of mail processing in Arizona. The ALJ took judicial notice of the following:

  • Consolidated Processing: Since 2013, the USPS has routed letter mail from Tucson to Phoenix for automated processing.
  • DMM § 608.11.3: Explicitly states that a postmark date does not necessarily indicate the first day the Postal Service had possession of a mailpiece; it represents the date of the first automated-processing operation.
  • Timing: Because the mail was metered in Tucson on June 23 and postmarked in Phoenix on June 24, the ALJ concluded it was logically in the possession of the USPS on June 23 to allow for transport to the Phoenix processing facility.
4. Requested Relief and Board Transition

The Petitioner sought an order declaring the recall remedy valid and potentially removing the entire board. However, the Respondent noted that the Petitioner had resigned from the board prior to the meeting, and no other directors were named in the removal petition. The Respondent argued that the Petitioner had already effectively received the relief sought (removal from the board) through her own resignation.

Important Quotes

From the Petitioner (Barbara G. Kunkel)

"The counting 6/24 excluded to 7/3 included yields 9 days, not 10… Because the February annual meeting is imminent… time is of the essence. I respectfully request an expedited ruling or an interim order clarifying that the recall remedy proceeds on its own timeline."

  • Context: Opening statement during the hearing, emphasizing the urgency of the ruling due to upcoming HOA elections.
From Respondent Counsel (Sean Moynihan, Esq.)

"The statute is specific that the notice must be sent… It does not say it must be mailed… it does not say it must be postmarked… we know with certainty that this notice was deposited in the mail on June 23rd. If it had been deposited on June 24th, it would not have been processed by the postal service."

  • Context: Closing argument focusing on the distinction between the act of sending and the act of postmarking.
From the Administrative Law Judge (Nedra-Su Kawasaki)

"It is reasonable to conclude that a notice stamped in Tucson on June 23, 2025, and postmarked in Phoenix on June 24, 2025, had to be in the possession of the Postal Service no later than June 23, 2025. Therefore… the notice at issue was mailed timely."

  • Context: The final Finding of Fact in the ALJ’s decision, which determined the outcome of the case.

Key Data and Statutory References

Statute/Reference Detail
A.R.S. § 33-1804(B) Notice must be sent 10–50 days before a meeting.
A.R.S. § 1-243(A) Time computation: exclude first day, include last.
DMM § 604.4.6.2 Metered mail must be deposited on the date shown in the indicia.
DMM § 608.11.3 Postmark indicates processing date, not necessarily possession date.
Hearing Date January 9, 2026.
Decision Date March 9, 2026.

Actionable Insights

  • Documentation of Deposit: For HOAs and management companies, maintaining records of when mail is actually deposited (e.g., certificates of mailing or affidavits of management) is more critical than the postmark, as postmarks often reflect processing delays.
  • Private Meter Reliability: Private meter stamps serve as strong evidence of the date of mailing in administrative hearings, provided they align with USPS processing logistics (such as the Tucson-to-Phoenix routing).
  • Statutory Compliance: Litigants should focus on the specific language of the statute (e.g., "sent" vs. "received"). In Arizona planned community law, the act of "sending" is the triggering event for notice compliance.
  • Remediation Limits: The Office of Administrative Hearings is limited by A.R.S. § 32-2199.02 to ordering parties to abide by statutes or levying civil penalties; it may not have the authority to grant broader equitable relief or "vacate" a board unless specific statutory failures are proven.

Study Guide: Kunkel v. Agua Dulce Homeowner Association (No. 25F-H092-REL)

This study guide provides a comprehensive overview of the administrative hearing and subsequent decision regarding the dispute between Barbara G. Kunkel and the Agua Dulce Homeowner Association. It covers the legal standards for notice in planned communities, the methodology for computing statutory time, and the distinction between mailing dates and postmarks.

I. Case Overview and Key Concepts

Central Dispute

The primary issue in this case was whether the Agua Dulce Homeowner Association (Respondent) provided timely notice for a special recall meeting held on July 3, 2025. Barbara G. Kunkel (Petitioner) alleged the notice was late, violating A.R.S. § 33-1804(B), and argued that under A.R.S. § 33-1813(D), the failure to hold a lawful recall meeting should have resulted in the automatic removal of the entire Board of Directors.

Key Legal Standards
  • A.R.S. § 33-1804(B): Requires that notice for a special meeting be "sent" by United States mail not fewer than 10 nor more than 50 days in advance of the meeting.
  • A.R.S. § 1-243(A): Establishes the method for computing time: exclude the first day and include the last day.
  • Burden of Proof: The Petitioner bears the burden of proving a violation by a preponderance of the evidence (showing the contention is more probably true than not).
The "Sent" vs. "Postmarked" Conflict

The core of the legal argument rested on the interpretation of when a notice is considered "sent."

  • Petitioner's View: The postmark date (June 24, 2025) is the official date of mailing. Because June 24 is only 9 days before July 3 (using statutory counting), the notice was untimely.
  • Respondent's View: "Sent" means the date the mail was deposited with the USPS. The private meter stamp (June 23, 2025) serves as evidence of deposit.
  • ALJ Decision: The Administrative Law Judge (ALJ) ruled that the notice was timely. The ALJ noted that the USPS Domestic Mail Manual (DMM) clarifies that postmarks—especially those from processing facilities—do not necessarily reflect the date the USPS first accepted possession of the mail.

II. Timeline of Relevant Events

Date Event Description
June 4, 2025 HOA Board authorizes Sienna Community Management and Smith & Wamsley to handle the recall process.
June 23, 2025 Notice packet is stamped by private meter in Tucson. This is the 10th day prior to the meeting.
June 24, 2025 Notice packet receives an automated USPS postmark at the Phoenix processing facility.
July 3, 2025 The special recall meeting is held.
October 22, 2025 Petitioner files a formal dispute with the Arizona Department of Real Estate (ADRE).
December 12, 2025 ALJ Nedra-Su Kawasaki issues an Order Setting Virtual Hearing.
January 9, 2026 Evidentiary hearing is conducted via Google Meet.
March 9, 2026 ALJ issues the final decision in favor of the Respondent.

III. Short-Answer Practice Questions

  1. According to A.R.S. § 1-243(A), how should the 10-day notice period for a July 3rd meeting be calculated?
  • Answer: Exclude the first day (July 3) and count backward. The 10th day is June 23. Therefore, notice must be sent no later than June 23.
  1. What was the Petitioner’s primary evidence that the notice was sent late?
  • Answer: Petitioner’s Exhibit 3, which showed a USPS postmark of June 24, 2025, rather than the required June 23 date.
  1. How did the Respondent explain the discrepancy between the June 23 meter stamp and the June 24 postmark?
  • Answer: Respondent argued that the mail was deposited in Tucson on the 23rd. Because USPS consolidated Tucson and Phoenix processing in 2013, mail deposited in Tucson is routed to Phoenix, resulting in a postmark from the following day.
  1. What does the USPS Domestic Mail Manual (DMM) say about the relationship between a postmark and the date of USPS possession?
  • Answer: The DMM states that a postmark date does not necessarily indicate the first day the Postal Service had possession of a mailpiece, as postmarks applied at processing facilities may reflect a later date.
  1. What is the legal definition of "preponderance of the evidence" used in this hearing?
  • Answer: Proof that convinces the trier of fact that a contention is "more probably true than not."
  1. Why did the ALJ refuse to remove the Board of Directors as requested by the Petitioner?
  • Answer: The ALJ found that the notice was sent timely (June 23), meaning no statutory violation occurred. Furthermore, the ALJ noted the tribunal is only authorized to order compliance with statutes and levy civil penalties, not to order "other remediation" like vacating a board.

IV. Essay Prompts for Deeper Exploration

  1. Statutory Interpretation of "Sent": Analyze the distinction between "sent," "mailed," and "postmarked." How does the ALJ’s reliance on the USPS Domestic Mail Manual (DMM) influence the interpretation of Arizona's planned community statutes? Discuss whether a "postmark" should be the absolute standard for legal deadlines or if "date of deposit" is a more equitable measure.
  1. Administrative Process and Burden of Proof: Explain the roles of the Arizona Department of Real Estate and the Office of Administrative Hearings in resolving HOA disputes. Discuss the challenges a Petitioner faces in meeting the "preponderance of the evidence" standard when challenging the internal administrative actions of an HOA, such as the timing of a mail drop.
  1. The Impact of Logistics on Law: In this case, the 2013 consolidation of USPS processing centers in Arizona played a pivotal role in the judge's decision. Evaluate how external infrastructure changes (like postal routing) can affect the practical application of state laws regarding notice and deadlines.

V. Glossary of Important Terms

  • Administrative Law Judge (ALJ): An official who presides over federal or state administrative proceedings, acting as both trier of fact and law.
  • A.R.S. § 33-1804(B): The specific Arizona Revised Statute governing notice requirements for meetings in planned communities.
  • Indicia: Markings on a mailpiece (such as a meter stamp or PC Postage) that indicate postage has been paid.
  • Notice of Hearing: A formal document notifying parties of the date, time, and location (or virtual platform) of a legal proceeding.
  • Planned Community: A real estate development where owners are mandatory members of an association (HOA) and are subject to specific statutes (Title 33, Chapter 16).
  • Postmark: A marking applied by the USPS indicating the date and location where a mailpiece was processed or accepted at a retail unit.
  • Preponderance of the Evidence: The evidentiary standard in civil and administrative cases requiring that a claim be more likely true than not.
  • Private Meter Stamp: A postage mark applied by a private machine (often in an office) rather than by the post office. Under DMM rules, the date on the meter must be the actual date of deposit.
  • Recall Meeting: A special meeting called specifically for the purpose of voting on the removal of one or more members of the Board of Directors.

The 10-Day Rule: Lessons from the Kunkel v. Agua Dulce HOA Recall Dispute

1. Introduction: The High Stakes of HOA Recalls

HOA recall elections are the "nuclear option" of community governance. In Arizona, these proceedings are fraught with tension because the statutory stakes are absolute. Under A.R.S. § 33-1813(D), if a recall is not noticed, called, and held in strict accordance with the law, the "stick" is severe: the entire board can face automatic removal. Because of this, technicalities regarding notice timelines are frequently used as "gotcha" tactics by disgruntled members seeking to invalidate an election.

The case of Barbara G. Kunkel v. Agua Dulce Homeowner Association serves as a definitive cautionary tale regarding these timelines. The dispute centered on a narrow 48-hour window and a fundamental legal question: In the eyes of Arizona law, when is a notice actually "sent"? The answer provides a vital roadmap for boards and homeowners navigating the treacherous waters of statutory compliance.

2. The Timeline: A Dispute Over Forty-Eight Hours

The conflict in Kunkel arose from a discrepancy between the physical markings on the envelopes sent to homeowners. While the HOA’s management intended to comply with the 10-day requirement, the official USPS postmark appeared to tell a different story.

The Recall Meeting Timeline (2025)

Date Event Legal Status
June 23 Private Meter Mark applied in Tucson / Management confirmed deposit. HOA’s Claimed Date
June 24 Official USPS Postmark (Phoenix Processing Center). Petitioner’s Evidence
July 3 The date the Recall Meeting was held. The Event Date

The Petitioner argued that the June 24 postmark was the only valid evidence of when the notice was "sent." Based on this, the Petitioner filed a claim asserting that the statutory deadline for mailing was June 22, and that the June 24 postmark was two days late, rendering the entire recall process void.

3. Arizona’s "Notice Math": How to Count to Ten

To resolve the dispute, the Administrative Law Judge (ALJ) utilized the "Notice Math" framework established by A.R.S. § 33-1804(B) and A.R.S. § 1-243(A). While the Petitioner claimed the deadline was June 22, the ALJ applied the standard computation of time to arrive at a different conclusion.

The ALJ computed the 10-day requirement using this bolded logic:

  1. Exclude the First Day: Per A.R.S. § 1-243(A), you do not count the day of the meeting itself (July 3).
  2. Count Backward: From July 2, you count back ten full days.
  3. Include the Last Day: The tenth day moving backward is June 23.

This calculation effectively rejected the Petitioner’s argument that the deadline was the 22nd. Consequently, the case turned entirely on whether the HOA "sent" the notice on the 23rd or the 24th.

4. The "Postmark" Trap: Meter Marks vs. USPS Processing

The crux of the hearing involved a deep dive into the USPS Domestic Mail Manual (DMM). The Petitioner relied on the "Postmark Trap"—the assumption that the black stamp on the envelope is the legal date of mailing. However, the ALJ examined the technical evidence of two distinct markings:

  • Private Meter Indicia (June 23): Under DMM § 604.4.6.2, mail pieces bearing a private meter date must be deposited on that same date. A "stale" meter mark (one dated earlier than the actual deposit) is generally rejected or requires a correction. Thus, the red June 23 mark served as contemporaneous evidence of the HOA’s act of depositing the mail.
  • USPS Postmark (June 24): Per DMM § 608.11.1, a postmark applied at a processing facility represents the "first automated-processing operation," not necessarily the date the USPS took possession of the mail.

The "smoking gun" in the HOA’s defense was the ALJ’s use of Administrative Notice regarding regional mailing logistics. The ALJ acknowledged the 2013 USPS consolidation, which closed Tucson’s processing center and routed all Tucson-originated mail to Phoenix. The court concluded that for a Tucson letter to receive a Phoenix postmark on the 24th, it was a "reasonable conclusion" that the mail was already in the possession of the USPS by the 23rd.

5. The Verdict: Why the HOA Prevailed

The ALJ ruled in favor of the Agua Dulce HOA, finding no statutory violation. The decision rested on a sharp distinction between the word "sent" in A.R.S. § 33-1804(B) and the word "postmarked."

The ALJ clarified that the statute requires notice to be sent—meaning placed into the custody of the USPS—rather than processed or stamped. Because the DMM confirms that a processing facility postmark may be later than the date of acceptance, and because management testified to depositing the mail on the 23rd, the HOA met its burden. The $500 filing fee paid by the Petitioner could not overcome the technical reality of how the USPS operates.

6. Key Takeaways for Homeowners and HOA Boards

As a governance advocate, I recommend that communities view this case as a warning. Even if you are legally in the right, technical ambiguity leads to litigation.

  • "Sent" vs. "Postmarked": Understand that "Sent" is the act of surrender to the USPS. However, avoid the "Postmark Trap" by aiming to send notices 12 to 13 days in advance. A two-day buffer renders these disputes moot and protects the board from the "automatic removal" risk of A.R.S. § 33-1813(D).
  • Maintain Proof of Deposit: Do not rely solely on a meter mark. Boards should require management to maintain a contemporaneous mailing log or obtain a "Certificate of Mailing" (Form 3817) for recall notices. This provides a paper trail that survives the delay of regional processing.
  • The Power of Administrative Notice: Be aware that courts can and will take notice of regional realities, such as the Tucson-to-Phoenix mail route. If you are a homeowner challenging a notice, a postmark alone may not be the "slam dunk" evidence you think it is.
7. Conclusion: Transparency and Compliance

Strict adherence to statutory notice requirements is the only way to avoid the high cost of administrative hearings and legal fees. In this case, the Petitioner's $500 filing fee and the HOA's legal defense costs were the price of a single day’s ambiguity.

Both boards and members benefit from transparency. By understanding "Notice Math" and the logistics of the USPS, communities can ensure that governance is decided on the merits of the leadership—not on the timing of a mail truck.

Case Participants

Petitioner Side

  • Barbara G Kunkel (Petitioner)
    Homeowner

Respondent Side

  • Sean K. Moynihan (Attorney)
    Smith & Wamsley PLLC
    Representing Respondent
  • Patricia Stracicia (Board Director)
    Agua Dulce Homeowner Association
    Testified as a witness
  • Cindy Reilly (Board Director)
    Agua Dulce Homeowner Association
    Testified as a witness
  • Jena Carpenter (Community Association Manager)
    Sienna Community Management
    Incoming agent who testified as a witness
  • Jose Bacerra (Outgoing Community Association Manager)
    Cadden Community Management

Neutral Parties

  • Nedra-Su Kawasaki (Administrative Law Judge)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

VINMAR LLC v. Third Avenue Lofts Unit Owner Association

Posted on by

Case Summary

Case ID 25F-H013-REL
Agency —
Tribunal —
Decision Date 2026-02-25
Administrative Law Judge NR
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner VINMAR LLC Counsel —
Respondent Third Avenue Lofts Unit Owner Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H013-REL Decision – 1250284.pdf

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25F-H013-REL Decision – 1250290.pdf

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25F-H013-REL Decision – 1265960.pdf

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25F-H013-REL Decision – 1266557.pdf

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25F-H013-REL Decision – 1266723.pdf

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25F-H013-REL Decision – 1278245.pdf

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25F-H013-REL Decision – 1295474.pdf

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25F-H013-REL Decision – 1309080.pdf

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25F-H013-REL Decision – 1318083.pdf

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25F-H013-REL Decision – 1336544.pdf

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25F-H013-REL Decision – 1338777.pdf

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25F-H013-REL Decision – 1347711.pdf

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25F-H013-REL Decision – 1352774.pdf

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25F-H013-REL Decision – 1357231.pdf

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25F-H013-REL Decision – 1379062.pdf

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25F-H013-REL Decision – 1380516.pdf

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25F-H013-REL Decision – 1380874.pdf

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25F-H013-REL Decision – 1380883.pdf

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25F-H013-REL Decision – 1399408.pdf

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Briefing Document: Vinmar LLC v. Third Avenue Lofts Unit Owner Association

Executive Summary

This document provides a comprehensive analysis of the administrative hearing Case No. 25F-H013-REL between Vinmar LLC (Petitioner) and Third Avenue Lofts Unit Owner Association (Respondent). The dispute centered on whether the Association's move-in and move-out fees were permissible under Arizona law and the community's governing documents.

The proceedings, which spanned from late 2024 to early 2026, culminated in a decision by the Office of Administrative Hearings (OAH). The Petitioner alleged that the Association imposed exploitative fees and rental rules that specifically targeted and discriminated against owners who rented their units. The Respondent maintained that the fees were reasonable "user fee assessments" authorized by the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) to offset administrative costs and wear and tear on common elements.

The Administrative Law Judge (ALJ) ultimately determined that while the Association's new fee structure was permissible, the previous application of a $150.00 move-out fee violated the CC&Rs in instances where no specific facility was used. Petitioner was deemed the prevailing party regarding those specific fees, and Respondent was ordered to refund the $500.00 filing fee.

Detailed Analysis of Key Themes

1. Statutory Compliance and A.R.S. § 33-1260.01

A central theme of the dispute was the interpretation of Arizona Revised Statute § 33-1260.01, which governs rental fees in condominiums.

  • Petitioner’s Argument: Petitioner argued that the statute caps tenant-related fees at $25.00 for processing disclosures and prohibits any other fees that treat rental units differently than owner-occupied units.
  • Respondent’s Argument: Respondent contended that move-in/move-out fees are not "rental fees" but rather universal association fees applied to any resident—owner or tenant—changing occupancy.
  • Legal Conclusion: The ALJ found that the statute does not prohibit move-in/move-out fees as long as they are applied equally to all units. The evidence showed Respondent charged the same fees to owner-occupants and tenants, thus meeting the "equal treatment" requirement.
2. Contractual Authority and "Facilities"

The legality of the fees also hinged on the Association's authority under its CC&Rs.

  • Facility Definitions: CC&Rs § 7.4 allows the Association to charge for the use of "certain recreational or other facilities." The ALJ identified "facilities" as items such as elevators, front-desk staffing, and security applications (e.g., Butterfly or Symmetry apps).
  • The Move-Out Violation: The ALJ ruled that charging a $150.00 move-out fee was impermissible if the departing resident did not use a facility. In the case of Petitioner’s pre-furnished units, tenants often moved out with only personal luggage, requiring no elevator padding or staff assistance. Charging a facility fee when no facility was used exceeded the Board’s authority.
3. Administrative Burden vs. Wear and Tear

The Respondent justified the fees through the testimony of General Manager Michelle Collins, who outlined the administrative and physical costs of occupancy changes:

  • Administrative Tasks: Staff time is required to set up new residents in the "Butterfly" building access system, the "Symmetry" garage app, and emergency communication databases.
  • Physical Logistics: Moves involve the use of service elevators and loading docks. The Association provides elevator padding and performs pre- and post-move inspections of hallways to mitigate damage.
  • Evolution of Fees: Over the course of the dispute, the Association adjusted its fees to be more equitable, eventually settling on a structure that distinguished between residents moving furniture and those in furnished units.
4. Allegations of Retaliation and Pattern of Conduct

The Petitioner attempted to broaden the scope of the hearing to include a "pattern of misconduct," alleging:

  • Discrimination: Claims that the Board intentionally discouraged rentals.
  • Amenity Access: Allegations that Respondent restricted Petitioner’s access to the pool and gym as a pressure tactic to force payment of contested fees.
  • Rule Changes: Claims that a 90-day rental minimum was illegally implemented via Board vote rather than a membership vote.
  • Procedural Ruling: The Tribunal limited the hearing to the single issue of move-in/move-out fees, noting that additional issues would require separate filing fees and petitions.

Important Quotes with Context

From the Petitioner (Jonathan Blangiardo)

"Essentially, a furnished property is the equivalent of someone walking in with a briefcase… It’s the equivalent of someone coming in with their groceries or a guest coming to stay for the weekend. That’s why this is different."

Context: During the September 19, 2025 hearing, Blangiardo used this analogy to argue that high move-in/out fees are unreasonable for furnished rentals, as they do not involve the heavy moving equipment or furniture that typical "moves" require.

From the Respondent's Witness (Michelle Collins)

"The $75 move-in, move-out fee if you’re utilizing the service elevator and are bringing in any type of furniture or large item. The $25 resident occupant fee is an administrative fee… It strictly covers the time to set up all of the access systems."

Context: Collins testified to the rationale behind the Association's revised fee structure, explaining the distinction between physical labor/wear-and-tear costs and administrative digital setup costs.

From the Administrative Law Judge (Samuel Fox/Nicole Robinson)

"Equal treatment is applying one rule for everyone, which is what Respondent had done. Petitioner sought equitable treatment, which would take other circumstances into account… and treat different units differently to promote fairness."

Context: Found in the final Decision (Findings of Fact 13), the ALJ clarifies the legal distinction between "equal" and "equitable," noting that while the law requires equality (treating everyone the same), it does not strictly mandate the specific fairness Petitioner requested regarding pre-furnished units.

"Specifically, it is more likely than not that one or more of the $150.00 move-out fees were charged when the individual moving out did not use any facility."

Context: This was the primary legal failure of the Association, leading to the ruling that the move-out fees were improperly applied in certain instances.

Fee Structure Summary

The following table outlines the evolution of the fees at Third Avenue Lofts as discussed in the testimony:

Fee Type Original Amount Revised Amount (2025) Application
Move-In Fee $150.00 $75.00 Residents moving furniture/using elevators
Move-Out Fee $150.00 $75.00 Residents moving furniture/using elevators
Check-In Fee N/A $25.00 Administrative setup (Furnished units)
Registration Fee $25.00 $25.00 Statutory tenant disclosure fee

Actionable Insights

  • Necessity of Facility Usage Linkage: For "User Fee Assessments" to remain valid under typical condominium CC&Rs, the Association must demonstrate that a facility was actually used. Associations cannot charge a flat "move-out" fee for residents who do not utilize physical facilities like elevators or loading docks.
  • Distinguishing Administrative vs. Statutory Fees: The $25.00 statutory cap under A.R.S. § 33-1260.01 specifically applies to disclosures. Associations may charge separate, additional administrative fees (like a "Check-In" fee) provided they are applied equally to both owners and renters and are authorized by the CC&Rs as a fee for service/facility.
  • Documentation of Intent: The Petitioner utilized internal Association communications where fees were labeled "rental fees" to argue discriminatory intent. Associations should use precise language in meeting minutes and ledgers to ensure fees are categorized by their function (e.g., "Elevator Usage Fee" or "Administrative Occupancy Setup") rather than by the resident's status.
  • Filing Procedures for OAH: Petitioners must ensure that every distinct factual issue is supported by a separate filing fee. Attempting to argue "patterns of conduct" or "multiple violations" under a single $500.00 filing fee may result in the Tribunal narrowing the case to only one issue, as seen in this matter.

Case Study: Vinmar LLC v. Third Avenue Lofts Unit Owner Association

This study guide analyzes the administrative hearing and subsequent legal decision regarding a dispute between a unit owner (Vinmar LLC) and a homeowners association (Third Avenue Lofts). The case primarily focuses on the legality of specific fees charged by the association and the interpretation of Arizona condominium statutes and community governing documents.

I. Case Overview and Procedural History

  • Parties:
  • Petitioner: Vinmar LLC (represented by manager Jonathan Blangiardo).
  • Respondent: Third Avenue Lofts Unit Owner Association (represented by legal counsel from CHDB Law LLP).
  • Case Number: 25F-H013-REL.
  • Venue: Arizona Office of Administrative Hearings (OAH).
  • Timeline:
  • October 3, 2024: Original petition filed with the Arizona Department of Real Estate.
  • December 10, 2024: Order issued denying the Motion to Dismiss and clarifying that only one issue would be addressed unless additional fees were paid.
  • September 19, 2025: Primary hearing session held.
  • February 17, 2026: Supplemental hearing and closing arguments.
  • February 25, 2026: Final Administrative Law Judge (ALJ) decision issued.

II. The Central Issue for Hearing

The hearing was restricted to a single factual issue due to the Petitioner only paying for one filing fee: Whether the Association’s move-in and move-out fees were permissible, and whether they violated A.R.S. § 33-1260.01.

Secondary Considerations (Limited by the Tribunal)

While the Petitioner attempted to introduce a "pattern of misconduct" (including amenity restriction, voting rights suspension, and 90-day rental rules), the Tribunal ruled these were outside the scope of the specific issue for hearing, though they were sometimes discussed to provide context for "intent."

III. Statutory and Governing Document Framework

The case centers on the interpretation of the following legal authorities:

Authority Reference Key Provision/Interpretation
A.R.S. § 33-1260.01(C) Tenant Disclosures Restricts the info an HOA can require regarding tenants to: names, contact info for adults, lease dates, and vehicle descriptions.
A.R.S. § 33-1260.01(D) Rental Fees Caps the fee for tenant disclosures at $25.00. Prohibits charging rental units differently than owner-occupied units, except for this fee and recreational facility fees.
CC&Rs § 3.3.1(a) Rule Making Grants the Association the right to adopt reasonable rules and regulations governing the use of Common Elements.
CC&Rs § 7.4 User Fees Authorizes the Association to establish and charge fees for the use of "certain recreational or other facilities."
CC&Rs § 4.14 Rental Restrictions (Cited by Petitioner) Concerns the equal treatment of units and restrictions on rules targeting rentals.

IV. Summary of Arguments

Petitioner’s Position (Vinmar LLC)
  • Discrimination: The HOA targeted rental owners by calling move-in/out fees "rental fees" in internal communications.
  • Statutory Violation: The $150 move-in/out fees were a "disguised" way to charge more than the $25 statutory cap for rentals.
  • Lack of Impact: Because the units were fully furnished, tenants moved in with minimal luggage (no furniture), meaning no wear and tear occurred on elevators or common elements to justify high fees.
  • Voidance: Argued that because the fees exceeded the statutory cap, the entire fee was void under A.R.S. § 33-1260.01.
Respondent’s Position (Third Avenue Lofts)
  • Uniform Application: The fees applied to everyone—owners moving in, owners moving out, and tenants. Therefore, it was not a "rental fee."
  • Cost Recovery: Fees cover administrative staff time (setting up fobs, apps, and registration) and physical wear and tear on "facilities" like elevators and hallways.
  • Contractual Authority: The CC&Rs allow for "User Fee Assessments" for facilities.
  • Reasonableness: The HOA eventually lowered the fees ($25 check-in, $75 for elevator furniture moves) to be responsive to owner concerns.

V. The Administrative Law Judge’s Findings

The final decision reached the following conclusions:

  1. Move-in Fees: Generally permissible as administrative "check-in" fees because every new resident (owner or tenant) uses "facilities" such as the security system, the phone apps for access, or the front desk attendant.
  2. Move-out Fees ($150): The Association violated its CC&Rs by charging move-out fees when a resident did not use any specific "facility." The ALJ noted that while moving in requires setting up fobs and apps, moving out (especially for a furnished unit) might involve no facility usage at all.
  3. The "Facility" Definition: A facility is something built or established for a purpose (elevators, security apps). Staff time alone is not a facility.
  4. Equal Treatment: Applying the same rule to everyone (even if it impacts short-term rentals more frequently) constitutes "Equal Treatment." Petitioner’s request to be charged less because their tenants were "low impact" was a request for "Equitable Treatment," which is not required by statute.
  5. Prevailing Party: Petitioner was deemed the prevailing party regarding the improper $150 move-out fees. The Respondent was ordered to refund the $500.00 filing fee to the Petitioner.

VI. Short-Answer Practice Questions

  1. What is the maximum fee an Arizona Condominium Association can charge for processing a new tenancy disclosure?
  • Answer: $25.00 (A.R.S. § 33-1260.01).*
  1. Under the Association's CC&Rs, what must a fee be tied to in order to be considered a "User Fee Assessment"?
  • Answer: The use of "certain recreational or other facilities" in the condominium.*
  1. Why did the ALJ rule that some of the $150 move-out fees were a violation of the CC&Rs?
  • Answer: Because the Association was only empowered to charge for the use of facilities. If a resident moved out of a furnished unit without using an elevator or needing administrative setup, no facility was used to justify the fee.*
  1. What was the Respondent’s primary defense against the claim of rental discrimination?
  • Answer: The fees were applied uniformly to all residents (owners and tenants) upon moving in or out, not just to renters.*
  1. How did the ALJ define "Equal Treatment" vs. "Equitable Treatment" in this case?
  • Answer: Equal treatment is applying the same rule to everyone. Equitable treatment would involve adjusting the rule based on specific circumstances (like a unit being furnished), which the HOA was not legally required to do.*

VII. Essay Prompts for Deeper Exploration

  1. Statutory Interpretation: Discuss how the term "facility" was used to determine the legality of HOA fees in this case. How did the ALJ distinguish between "staff time" and "facilities," and why was this distinction critical to the final order?
  2. The Conflict of Governing Documents and State Law: Analyze the interplay between A.R.S. § 33-1260.01 and the Association’s CC&Rs. If an HOA names a fee a "move-in fee" but uses it to process tenant paperwork, at what point does it violate the $25 statutory cap on rental registration?
  3. The Burden of Proof in Administrative Hearings: Using the testimony of Michelle Collins and Jonathan Blangiardo, evaluate the "preponderance of the evidence" standard. Why did the Petitioner succeed on the move-out fee claim but fail to prove that the move-in fees were also unauthorized?

VIII. Glossary of Important Terms

  • Administrative Law Judge (ALJ): A judge who over-sees hearings and issues recommendations or decisions for state agencies (in this case, the OAH for the Dept. of Real Estate).
  • Common Elements: All portions of the condominium other than the individual units (e.g., hallways, elevators, pool, lobby).
  • Condominium Documents (CC&Rs): Covenants, Conditions, and Restrictions; the legal "contract" that binds unit owners to the association's rules.
  • Facility: Something built, installed, or established to serve a particular purpose (e.g., a service elevator or a mobile entry app).
  • Petitioner: The party who files the complaint (Vinmar LLC).
  • Respondent: The party responding to the complaint (Third Avenue Lofts).
  • User Fee Assessment: A fee charged specifically to owners for the use of certain amenities or facilities, separate from general assessments.
  • Voidance: The legal principle established in A.R.S. § 33-1260.01 stating that if an association attempts to charge a fee exceeding the statutory limit, the entire fee is considered void.

The High Cost of "Checking In": Lessons from an Arizona HOA Fee Battle

In the world of luxury high-rises, the difference between a "move" and a "check-in" can cost hundreds of dollars. Imagine a tenant arriving at a pre-furnished unit at the Third Avenue Lofts in Scottsdale. They aren't hauling heavy armoires or scratching hallway paint; they are simply walking through the front door carrying a single briefcase.

Yet, for years, the Third Avenue Lofts Unit Owner Association treated this briefcase-toting tenant the same as a full-scale moving crew, imposing a $150 "move-in" fee and a $150 "move-out" fee. This practice sparked a protracted legal battle—Vinmar LLC v. Third Avenue Lofts Unit Owner Association—that serves as a critical case study on the boundaries of HOA power, the definition of "facilities," and the statutory protections afforded to rental property owners under Arizona law.

The Case Profile: Vinmar LLC v. Third Avenue Lofts

Detail Information
Parties Petitioner: Vinmar LLC (represented by Jonathan Blangiardo) / Respondent: Third Avenue Lofts Unit Owner Association
The Venue Arizona Office of Administrative Hearings (OAH)
The Timeline Late 2024 (initial filing) through a series of continuances and status updates to the final decision on February 25, 2026.
Core Issue Whether $150 move-in/move-out fees are permissible under Arizona law (A.R.S. § 33-1260.01) and the community's CC&Rs.

The Homeowner’s Challenge: Discrimination or Uniformity?

Jonathan Blangiardo, managing member of Vinmar LLC, brought the challenge after his ledger was hit with thousands of dollars in fees. A real estate broker himself, Blangiardo argued that the Association’s fee structure was specifically designed to exploit owners who utilized their units for rentals.

Key arguments raised during the hearings included:

  • The "Briefcase" Argument: For pre-furnished units, tenants do not use service elevators or moving pads. Blangiardo argued that charging these units for "wear and tear" that never occurred was arbitrary and violated A.R.S. § 33-1227, which requires equal treatment of units.
  • Statutory Caps: Blangiardo cited A.R.S. § 33-1260.01, which caps tenant registration fees at $25. He argued the $150 charge was an illegal end-run around this limit.
  • Retaliatory Impact: The battle was deeply personal. While battling COVID-19 and traveling abroad, Blangiardo saw his amenity access and voting rights suspended for nearly a year due to the unpaid fees. He testified that the loss of pool and gym access for a unit overlooking the pool area created a significant bottleneck for his rental business.

The Association’s Defense: Protecting the Common Elements

The Association’s defense relied on the testimony of General Manager Michelle Collins, who had been on the job for just 11 days when she was cross-examined in September 2025.

Defense Strategy

  • Administrative Burden: The Association argued that every new occupant, regardless of luggage size, requires staff time to set up the "Butterfly" entry app, garage stickers, and emergency contact profiles.
  • Wear and Tear: The fees were positioned as a way to offset the inevitable damage to elevators and hallways caused by the constant turnover of occupants in a high-density building.
  • Uniformity: The Association's primary legal shield was the claim of equality. Because the fees were applied to everyone—owner-occupants and tenants alike—they argued the charge did not "treat rentals differently" under the law.

The "Facilities" Turning Point: CC&R Analysis

The outcome hinged on the specific language of the community’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs). Administrative Law Judge (ALJ) Samuel Fox presided over the evidence, but the final verdict was authored and signed by ALJ Nicole Robinson. The court performed a deep dive into two specific sections:

CC&Rs § 3.3.1(a): Grants the Association the right to "adopt reasonable rules and regulations governing the use of the Common Elements." CC&Rs § 7.4: States that the Association "may establish and charge fees for the use of certain recreational or other facilities in the Condominium."

The Judge made a distinction that should serve as a warning to every HOA board in Arizona: Staff time is not a facility. While a moving elevator or a parking app is a "facility" (something built or installed for a purpose), the administrative labor of a manager is not.

Under the Third Avenue Lofts CC&Rs, the board had the power to charge for facilities, but they lacked the specific authorization to charge for administrative labor. Therefore, if a resident moves out without using a tangible facility—like a tenant in a furnished unit simply walking out the front door with a suitcase—the Association has no legal ground to assess a fee.

The Verdict: Who Won?

Verdict Summary

  • The $150 Move-Out Fee: Ruled a violation of the CC&Rs. The Judge found it "plausible" that move-outs from furnished units involve zero use of facilities (no service elevator, no loading dock).
  • The Move-In Fee: While the Judge noted a violation was plausible here too, the evidence did not sufficiently prove that no facilities (like the entry app) were used during the move-in process.
  • The New Fee Regime: During the litigation, the Association updated its fees to a more granular structure: a $25 registration fee, a $25 check-in fee, and a $75 Elevator Fee specifically for moving furniture. The Judge found no violation in this updated structure.
  • The Penalty: Because Vinmar LLC was the "prevailing party" on the move-out fee issue, the Association was ordered to reimburse the $500 filing fee.

Actionable Takeaways for Homeowners and Boards

The Vinmar case provides a clear roadmap for the "High Cost of Checking In" in Arizona:

  1. Statutory Caps Carry Teeth: Per A.R.S. § 33-1260.01, the cap for "tenant registration" is $25. Crucially, the law states that any attempt to exceed this cap voids the fee entirely. Boards cannot simply "overcharge" and hope to keep the first $25; if they overreach, they may lose the right to collect anything.
  2. Labor is Not a Facility: Unless your CC&Rs explicitly authorize "Administrative Fees" or "Service Charges," you cannot use "Staff Time" as a proxy for a facility fee. Fees must be tied to the use of tangible improvements (elevators, gyms, apps).
  3. Equity vs. Equality: The Association’s downfall was trying to treat a briefcase (low impact) the same as a moving truck (high impact). Moving toward an "Elevator Fee" for furniture versus a "Check-in Fee" for furnished units was the key to a legally defensible policy.
  4. Pay Under Protest: This case dragged on for over a year, during which the petitioner lost pool and gym access because he refused to pay the disputed fees. For homeowners, the lesson is visceral: It is often better to pay "under protest" to preserve your rights of enjoyment while the legal process slowly grinds toward a conclusion.

Case Participants

Petitioner Side

  • Jonathan W. Blangiardo (Manager/Representative)
    VINMAR LLC
    Testified on behalf of petitioner
  • Jonathan Dales (Attorney)
    Submitted a demand letter on behalf of community members/petitioner

Respondent Side

  • Tessa Knueppel (Counsel)
    Third Avenue Lofts Unit Owner Association
    Appeared for Respondent during hearings
  • Alexis Firehawk (Counsel)
    CHDB Law LLP
    Attorney for Respondent
  • Emily Cooper (Counsel)
    CHDB Law LLP
    Attorney for Respondent
  • Shane Gillaspie (Representative)
    Third Ave Lofts Unit Owners Association
  • Michelle Collins (General Manager)
    Third Avenue Lofts Unit Owner Association
    Testified as a witness for the respondent
  • Leonard Hack (Board President)
    Third Avenue Lofts Unit Owner Association
    Also referred to as Len Hack
  • Frank Nardini (Board Member)
    Third Avenue Lofts Unit Owner Association
  • Kyle Snowden (Board Member)
    Third Avenue Lofts Unit Owner Association
  • Raj Sons (Community Manager)
    Third Avenue Lofts Unit Owner Association
    Prior community manager present at July 2023 board meeting

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
    Presiding judge for majority of the proceedings
  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Signed the final Administrative Law Judge Decision
  • Tammy L. Eigenheer (Administrative Law Judge)
    Office of Administrative Hearings
    Issued order granting continuance
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
  • Judge Swan (Mediator)
    Acted as mediator during settlement discussions

Joseph Allan vs The Springs Condominium Association

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Case Summary

Case ID 25F-H081-REL
Agency —
Tribunal —
Decision Date 2/5/2026
Administrative Law Judge VMT
Outcome Petition is dismissed
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Joseph Allan Counsel —
Respondent The Springs Condominium Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H081-REL Decision – 1374850.pdf

Uploaded 2026-04-24T12:55:08 (73.8 KB)

25F-H081-REL Decision – 1393068.pdf

Uploaded 2026-04-24T12:55:18 (106.6 KB)

Case Briefing: Joseph Allan v. The Springs Condominium Association

Executive Summary

This briefing document summarizes the administrative hearing and subsequent decision in the matter of Joseph Allan v. The Springs Condominium Association (Case No. 25F-H081-REL). The dispute centered on a petition filed by Mr. Allan, a unit owner, alleging that the Association violated Arizona Revised Statute (A.R.S.) § 33-1258 by failing to provide requested financial records.

The core of the conflict involved a $15,240 tax refund from the 2022 tax year that Mr. Allan asserted was missing from the Association’s 2023 financial reports. Mr. Allan sought physical documentation—such as checks or deposit receipts—to verify the handling of these funds. The Association, represented by its Treasurer, John Calgamone, and Property Manager, Belen Guzman, maintained that the funds were never received as a check but were instead applied as a rolling credit toward future tax liabilities to avoid penalties.

On February 5, 2026, Administrative Law Judge (ALJ) Velva Moses-Thompson issued a decision dismissing the petition. The ALJ concluded that Mr. Allan failed to establish that the Association was in possession of the specific records requested (checks/receipts), as the evidence indicated the refund existed only as an IRS credit rather than a liquid asset.

Detailed Analysis of Key Themes

1. The Dispute Over the $15,240 Tax Refund

The primary catalyst for the hearing was Mr. Allan’s discovery that a $15,240 refund shown on the 2022 tax return (Form 1120) did not appear on the 2023 tax return or audit. Mr. Allan contended that because the IRS typically issues checks within 30 to 60 days, the absence of this money on the Association's financial ledgers suggested potential mismanagement or lack of transparency.

Conversely, the Association provided testimony that the credit had been "rolling over" for approximately seven years. The Association’s strategy was to leave overpayments with the IRS to cover future liabilities, a decision made because the property generates income through a restaurant and rentals, which carries a higher risk of tax penalties.

2. Statutory Requirements and Burden of Proof

The case was argued under A.R.S. § 33-1258, which requires condominium associations to make financial and other records reasonably available for examination by a member within ten business days.

  • The Petitioner’s Burden: As the party with the burden of proof, Mr. Allan had to demonstrate by a "preponderance of the evidence" that the Association violated the statute.
  • The Findings: The ALJ determined that an association cannot be found in violation of failing to provide records that do not exist. Since the Association had not received a physical check, they could not produce a copy of a check or a deposit receipt.
3. Communication Protocols and Management Relations

A recurring theme throughout the testimony was the procedural friction between Mr. Allan, the Board of Directors, and the management company, SSC Property Management.

  • Direct vs. Indirect Requests: The Association argued that Mr. Allan frequently bypassed the management company, sending requests only to Board members. While the ALJ noted there was no formal rule requiring requests to go through management, the Association testified that this caused delays because the Board members are volunteers and do not maintain the physical records.
  • Availability for Inspection: The Association emphasized that records are kept in an office just a short walk from Mr. Allan's unit and that he had been invited to inspect the files in person, an invitation he reportedly did not accept.
4. Professional Reliance and Accounting Expertise

The testimony revealed a reliance on external experts (Butler and Hansen, CPAs) to navigate IRS communications. Treasurer John Calgamone admitted to a lack of formal accounting training, stating he relied on Miss Guzman and the hired CPAs to ensure the Association's financial health. Mr. Allan challenged this, arguing that the Board should have more direct knowledge of IRS documents, specifically the CP145 (IRS Notice of Correction).

Key Quotes and Context

Regarding the Management of the Refund

"Rather than accept the overpayment, I made a point to tell the property manager to tell the accountant we want to leave that for next year's taxes so that we have already paid any money due next year." — John Calgamone, Association Treasurer

Context: This explains the Association's rationale for the missing "check." They viewed the refund as a strategic credit rather than a cash inflow.

Regarding the Request for Records

"You continue to demand letters that simply do not exist. We you have been told that you are welcome to make appointments to inspect the records in person to see for yourself which records are in hand. You have not done so." — Belen Guzman, Property Manager (quoting an email to Mr. Allan)

Context: This highlights the Association’s defense: they provided what they had (an IRS letter from November 2023) and argued that Mr. Allan was demanding documentation of a transaction that never took place in the form he imagined.

Regarding the Petitioner's Motivation

"Nothing. I made it clear a couple years ago that I'll be looking into our financials and straightening out our financials. And that's what I've been doing. I've been doing it professionally, diplomatically, politely." — Joseph Allan, Petitioner

Context: Mr. Allan framed his actions as a necessary oversight role to ensure the financial integrity of the 203-property community.

Regarding the Legal Representation Rule

"Miss Guzman can represent the [entity] but Miss Guzman and no other person can be receiving payment for the representation… unless your representative is an Arizona licensed attorney." — Judge Velva Moses-Thompson

Context: The Judge clarified the procedural rules of the Office of Administrative Hearings, noting that while property managers can represent associations, they cannot be specifically compensated for that legal representation unless they are licensed attorneys.

Actionable Insights

For Association Governance
  • Clarify Credit vs. Cash: Associations should ensure that tax credits held by the IRS are clearly footnoted in internal financial statements to prevent the appearance of "missing" funds.
  • Formalize Record Request Procedures: To avoid confusion, associations should adopt and distribute a written rule specifying the preferred channel for record requests (e.g., via the management company) as permitted by A.R.S. § 33-1258.
  • Documentation of IRS Communications: Maintain a dedicated file for all IRS notices (like CP145) to demonstrate a clear paper trail during audits or member inquiries.
For Members Requesting Records
  • In-Person Inspection: If a records dispute arises, the requesting member should utilize their right to inspect records in person. This can clarify whether a document is being withheld or if it truly does not exist.
  • Inclusion of Management: Even if not legally required, including the property management company on all formal record requests can expedite the process, as they are typically the custodians of the records.
Legal Summary Table
Item Detail
Case Number 25F-H081-REL
Statute in Question A.R.S. § 33-1258
Presiding Judge Velva Moses-Thompson
Final Decision Petition Dismissed; Association deemed prevailing party
Decision Date February 5, 2026

Case Study Guide: Joseph Allan v. The Springs Condominium Association

This study guide provides a comprehensive overview of the administrative hearing and subsequent legal decision regarding Joseph Allan v. The Springs Condominium Association (No. 25F-H081-REL). It covers the legal frameworks, key arguments, and procedural rules discussed in the source context.

Key Legal Concepts and Background

1. Arizona Revised Statute § 33-1258

The central legal issue in this case is whether the Association violated A.R.S. § 33-1258, which governs the availability of records for condominium associations.

  • Access: All financial and other records must be made "reasonably available" for examination by any member or their designated representative.
  • Fees: Associations cannot charge for the review of records but may charge up to $0.15 per page for copies.
  • Timeline: Associations have 10 business days to fulfill a request for examination or to provide copies of requested records.
2. Legal Representation in Administrative Hearings

According to Arizona Supreme Court rules for administrative hearings:

  • A community manager or designated person can represent an association.
  • However, that representative cannot receive a fee for the representation unless they are a licensed attorney in Arizona.
  • In this case, the ALJ moved the primary representation from the community manager (Belen Guzman) to the Association Treasurer (John Calderone) because Guzman confirmed she was receiving a fee for her role in the hearing.
3. Burden of Proof

In these proceedings:

  • The Petitioner (Joseph Allan) carries the burden of proof to establish a violation by a preponderance of the evidence. This means proving that the contention is "more probably true than not."
  • The Respondent (The Springs Condominium Association) carries the burden of establishing any affirmative defenses by the same standard.

Case Overview: The Tax Refund Dispute

The dispute originated from Joseph Allan's request for documentation regarding a $15,240 tax refund (alternatively cited as $15,199 or $15,890 in various testimony) from the 2022 tax year.

Participant Role Key Argument/Evidence
Joseph Allan Petitioner (Homeowner) Claimed the Association failed to provide proof of how the refund was handled. He requested checks, deposit receipts, or IRS documentation.
John Calderone Association Treasurer Testified that the Association chose to roll the credit over for future tax liabilities rather than taking a check to avoid penalties and cover future income taxes.
Belen Guzman Property Manager Stated that the Association has treated the refund as a rolling credit for nearly seven years and that no refund check existed at the time of the request.
Velva Moses-Thompson Admin. Law Judge Ruled that the Petitioner failed to prove the Association possessed the specific records (the check/receipt) he was requesting.

Short-Answer Practice Questions

1. What was the specific dollar amount of the tax refund Joseph Allan discovered was missing from the 2023 tax return? Answer: $15,240.

2. Which Arizona Revised Statute was the Association accused of violating? Answer: A.R.S. § 33-1258.

3. Why did the Administrative Law Judge (ALJ) question Belen Guzman’s ability to represent the Association? Answer: Under Arizona Supreme Court rules, a non-attorney cannot receive a fee for representing a party in these hearings. Guzman admitted she was receiving a fee for the representation.

4. How many days does an association have to fulfill a request for records under Arizona law? Answer: Ten business days.

5. What explanation did the Association provide for why there was no "check" or "deposit receipt" for the tax refund? Answer: The Association opted to have the refund applied as a credit toward future tax liabilities (rolling credit) rather than receiving a physical check.

6. Who did Joseph Allan submit his initial records request to on November 22, 2024? Answer: He submitted the request via email to several board members (including the Treasurer, Vice President, and Director) but did not include the property management company.

7. What was the final decision of the Administrative Law Judge regarding Mr. Allan’s petition? Answer: The petition was dismissed because the Petitioner failed to establish that the Association was in possession of records showing how the refund was handled (as the check did not exist).

Essay Prompts for Deeper Exploration

1. Statutory Compliance vs. Physical Existence of Records

Discuss the legal dilemma presented when a member requests a specific type of record (e.g., a check or deposit receipt) that does not exist. Based on the ALJ’s ruling, does an association have an obligation under A.R.S. § 33-1258 to create a record or provide an explanation for a record's absence, or is their duty strictly limited to providing existing documents?

2. Communication Protocols in Homeowners Associations

The Association argued that Mr. Allan’s failure to include the management company in his requests led to delays and missing information. Examine the tension between a member's right to request records from the Board of Directors versus the Association’s preference for requests to go through a "central depository" (the property manager). Should a written rule be required to mandate where requests are sent?

3. Professional Reliance in Association Management

John Calderone testified that board members are not experts in accounting and must rely on property managers and CPAs (Butler Hansen). Analyze the role of "expert reliance" in this case. How did the Association's reliance on a CPA firm to handle IRS communications affect their ability to fulfill the homeowner's document request in a timely manner?

Glossary of Important Terms

  • A.R.S. § 33-1258: The Arizona statute requiring condominium associations to make financial and other records available to members within ten business days.
  • Administrative Law Judge (ALJ): An official who presides over an administrative hearing and makes a recommended or final decision.
  • CP145: An IRS notice of correction mentioned during testimony regarding tax adjustments.
  • Closing Argument: The final statement made by each party at the end of a hearing to explain why the judge should rule in their favor based on the evidence.
  • Office of Administrative Hearings (OAH): The agency responsible for conducting independent hearings for various state agencies.
  • Petitioner: The party who initiates a legal action or petition (in this case, Joseph Allan).
  • Preponderance of the Evidence: The standard of proof used in civil and administrative cases, meaning the evidence shows that a claim is "more likely than not" to be true.
  • Respondent: The party against whom a legal action or petition is filed (in this case, The Springs Condominium Association).
  • Rolling Credit: An accounting practice where a tax refund is not taken as cash but is instead left with the IRS to be applied against future tax obligations.
  • Under Advisement: A status where a judge takes time to consider the evidence and arguments before issuing a final decision.

The Case of the "Missing" $15,000: Lessons in HOA Transparency and Tax Credits

In the delicate ecosystem of community governance, trust is the currency that keeps a board functioning. When a homeowner—especially a former board member who knows where the proverbial bodies are buried—suspects financial foul play, the results are often explosive. Such was the scene at the Office of Administrative Hearings (OAH) in the case of Joseph Allan v. The Springs Condominium Association.

At the heart of the dispute was a "missing" $15,240 tax refund. Mr. Allan, a diligent critic of the Association’s financials, was convinced the money had been mishandled or hidden by the board. The irony? The Association was using the very CPA firm, Butler & Hansen, that Mr. Allan himself had recommended during his tenure on the board. This case serves as a masterclass in how a misunderstanding of sophisticated tax strategies and a breakdown in communication can lead to costly, unnecessary litigation.

The Petitioner’s Argument: "Where is the Money?"

Mr. Allan’s suspicion began when he reviewed the Association's 2022 tax return (Form 1120), which indicated an overpayment of $15,240. When this "refund" failed to appear as miscellaneous income in the 2023 financial reports or audits, he sounded the alarm. His argument was built on a simple premise: if the IRS owes the Association money, there should be a paper trail of its arrival and deposit.

In his testimony, Mr. Allan sought:

  • Physical Evidence: Copies of checks, deposit receipts, and specific general ledger entries for the 2022 tax year.
  • Fiduciary Justification: An explanation as to why the Board would leave $15,000 with the IRS rather than depositing it into a high-yield CD earning roughly 4% interest.
  • Expanded Inquiry: During the hearing, his suspicion widened to include a state tax refund of $3,656, which he also claimed was unaccounted for in the financial history.
The Association’s Defense: Credits vs. Checks

The Association’s Treasurer, John Caldamone—a volunteer who candidly admitted he was not an accountant by trade—provided the necessary business context. Unlike a standard residential HOA, The Springs is a taxable entity that operates a restaurant on-site and generates rental income. This creates a complex tax liability that most community associations never face.

The Property Manager, Belen Guzman, testified that the $15,000 was not a one-time windfall but a "rolling credit" that the Association had maintained with the IRS for nearly seven years to provide a "cushion" against potential penalties and underpayments.

Perception vs. Financial Reality

Petitioner’s Assumption Association’s Financial Reality
The IRS sent a $15,240 refund check to the Association in 2022. The amount was a rolling credit maintained for 7 years to offset high tax risks from restaurant and rental income.
The Board is intentionally withholding copies of the refund check. No check exists. The IRS actually sent a letter (received the day of the hearing) asking for more information before they would even consider issuing a check.
The money is "missing" because it isn't listed as "Miscellaneous Income." Because the funds never left the IRS’s possession, they cannot be recorded as cash income or a deposit in the Association's ledger.
The Communication Breakdown: The Management "CC" Conflict

A recurring theme in this dispute was a failure to follow established communication protocols. The Association pointed out that this was the second hearing involving Mr. Allan’s record requests. In a prior Department of Real Estate (DRE) hearing, Mr. Allan had been specifically instructed to include the management company, SSC Property Management, in his formal requests.

Despite this, Mr. Allan continued to email volunteer board members directly, excluding management. As a legal columnist, I often see this: homeowners believe they are going to "the source" by emailing the Board, but the physical "tax file" and financial records reside with the professional manager. By failing to include the manager, Mr. Allan created a lag in response that he interpreted as a cover-up.

The Legal Verdict: Why the Petition was Dismissed

Administrative Law Judge Velva Moses-Thompson dismissed the petition, ruling in favor of the Association. The decision rested on a fundamental interpretation of A.R.S. § 33-1258.

Key Legal Conclusion: An Association’s "right to manage its tax strategy" is distinct from a homeowner's "right to inspect records." Furthermore, the law only requires the production of records in existence. An Association cannot be found in violation for failing to provide a check that was never issued or a deposit slip that was never printed.

The Judge also noted a technical nuance of Arizona OAH hearings: she inquired whether Ms. Guzman was receiving a fee for her representation. Under Arizona Supreme Court rules, a non-attorney (like a property manager) can represent an HOA, but they cannot be paid specifically for that representation unless they are a licensed attorney. This highlighted the Association’s reliance on its volunteers and professional staff to navigate legal hurdles.

Summary of Key Insights for Homeowners and Boards

This case illustrates that transparency is not just about showing the books; it’s about explaining the "why" behind the numbers.

  1. Understand "Rolling Credits": For associations with high-risk tax profiles (like those with commercial income), keeping a credit with the IRS is a legitimate business strategy to avoid penalties.
  2. Verify Document Existence: The "right to inspect" is not a "right to demand the creation of new documents." If the IRS hasn't sent a check, the Board cannot produce one.
  3. Follow the Paper Trail (and the Protocol): Homeowners must include both the Board and Management in requests. As this case showed, a recurring failure to follow protocol can undermine a petitioner's credibility in court.
  4. The Irony of Expertise: Relying on professional CPAs (like Butler & Hansen) provides the Board with a "shield" of professional advice. If the CPA verifies the tax strategy, a homeowner’s disagreement with that strategy rarely constitutes a legal violation.
Closing: Building Trust Through Clarity

The dispute at The Springs was less about a "missing" $15,000 and more about a missing explanation. While the Board was legally vindicated, the time and stress of an administrative hearing could likely have been avoided with proactive financial education. When boards have unique tax liabilities—like a restaurant or rental units—they should over-communicate their tax strategies in annual meetings. Clarity is the best defense against suspicion.

Case Participants

Petitioner Side

  • Joseph Allan (Petitioner)
    Self-represented homeowner

Respondent Side

  • John Calgamone (Treasurer)
    The Springs Condominium Association
    Appeared and testified on behalf of the respondent
  • Belen Guzman (Property Manager)
    SSC Property Management
    Represented and testified for the Association management
  • Petri Ahonan (Director / President)
    The Springs Condominium Association
    Board member mentioned in testimony
  • Don Simpson (Board Member)
    The Springs Condominium Association
    Board member mentioned in testimony
  • Kevin Steffy (Vice President)
    The Springs Condominium Association
    Board member mentioned in testimony
  • Tom Commerce (Board Member)
    The Springs Condominium Association
    Board member mentioned in testimony

Neutral Parties

  • Velva Moses-Thompson (Administrative Law Judge)
    Office of Administrative Hearings
    Presiding judge who authored the final decision
  • Sondra J. Vanella (Administrative Law Judge)
    Office of Administrative Hearings
    Authored the order granting continuance
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Virgina Kostman v. Bella Tierra Community Association

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Case Summary

Case ID 25F-H084-REL
Agency —
Tribunal —
Decision Date 2026-01-09
Administrative Law Judge SJV
Outcome Petitioner's petition is affirmed.
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Virginia Kostman Counsel —
Respondent Bella Tierra Community Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H084-REL Decision – 1373536.pdf

Uploaded 2026-04-24T12:55:27 (69.4 KB)

25F-H084-REL Decision – 1384451.pdf

Uploaded 2026-04-24T12:55:30 (100.6 KB)

25F-H084-REL Decision – 1392666.pdf

Uploaded 2026-04-24T12:55:33 (45.7 KB)

Administrative Briefing: Kostman v. Bella Tierra Community Association (No. 25F-H084-REL)

Executive Summary

This document provides a comprehensive overview of the administrative hearing and subsequent decision in the matter of Virginia Kostman v. Bella Tierra Community Association. The dispute centered on a $20 delinquency fee assessed against a homeowner following a chaotic transition between property management companies.

The Administrative Law Judge (ALJ) ruled in favor of the Petitioner, Virginia Kostman, finding that the Bella Tierra Community Association (Respondent) violated its own Covenants, Conditions, and Restrictions (CC&Rs) by deeming a payment delinquent when it had been sent to the address provided on the official billing statement. The final order mandated the removal of the delinquency fees and required the Respondent to reimburse the Petitioner’s $500.00 filing fee. Subsequent filings indicate the Respondent has failed to comply with the reimbursement order.

Case Overview

• Petitioner: Virginia Kostman

• Respondent: Bella Tierra Community Association

• Management Entities: Platinum Management, Inc. (former); Agave Management Solutions (current).

• Primary Issue: Violation of CC&R Article 6.9.1 regarding the assessment of delinquency and late fees.

• Docket Number: 25F-H084-REL

• Hearing Date: December 30, 2025

Factual Background and Timeline

The dispute originated from the abrupt closure of the Association’s management firm and subsequent communication failures during the transition.

The Management Transition

• December 2024: Platinum Management, Inc. issued the first quarter 2025 assessment bills, which were due January 1, 2025. The bills directed homeowners to send payments to Platinum’s address.

• December 17, 2024: Platinum Management abruptly ceased operations.

• January 2025: Agave Management Solutions, founded by a former Platinum executive assistant, assumed management duties.

• Early January 2025: Agave mailed notices to homeowners regarding an updated mailing address for payments.

The Payment Conflict

• January 31, 2025: Petitioner initiated a bank bill-pay for the assessment. Because she had already received the December bill directing payment to Platinum, the payment was sent to the old address.

• March 4, 2025: Petitioner received notice from her bank—not the Respondent—that the check had been returned and destroyed due to an incorrect address.

• April 3, 2025: Petitioner attempted to notify the Respondent of the issue via their online portal. The Respondent claimed they did not receive this message because the portal was not yet fully operational.

• June 2025: Respondent assessed two delinquency fees totaling $20.00 to the Petitioner’s account for the “unpaid” January assessment.

• July 2025: Petitioner paid the January assessment a second time to resolve the balance.

Analysis of Arguments

Petitioner’s Position

Virginia Kostman argued that she was never delinquent because she followed the instructions provided on the official billing statement. She characterized the HOA’s actions as a “campaign of harassment” and an “extortion racket,” alleging that the management company knowingly assessed fees on homeowners who were victims of the management company’s own relocation errors.

Key Quotes from Petitioner:

• “I paid that assessment the minute I got the bill on time to the correct address. It’s a misstatement of fact to characterize it as an unpaid bill.”

• “They’ve been doing it knowingly… this was not a mistake. This was done on purpose.”

• “Being delinquent still prevents me from voting for the new HOA board… It is entirely possible they’re just doing this on purpose to keep me from being able to vote.”

Respondent’s Position

The Association, represented by counsel Eric O’Connor and witness Sarah Malovich (CFO of Agave Management), argued that the Petitioner was technically delinquent because the payment was not “received” by the current management by the January 31 deadline. They maintained that the delinquency fees were merely pass-through costs for administrative work (sending letters) and not penalties.

Key Quotes from Respondent Representatives:

• Eric O’Connor: “This case does not involve a refusal to accept the payment, a failure to communicate, or an improper assessment of penalties. It involves a delayed payment made unintentionally… and an association that exercised patience.”

• Sarah Malovich: “A delinquency fee is a fee that is charged to the association when letters have to go out to the homeowners… we add that fee to the homeowner’s account so that when the homeowner pays, the association recoups the money.”

Governing Provisions: CC&R Article 6.9.1

The hearing focused on the interpretation of Article 6.9.1, which states:

• Any assessment not paid within 15 days of the due date is deemed delinquent.

• Delinquent assessments bear interest at 12% per annum.

• The Board may establish a late fee not to exceed $15 or 10% of the unpaid amount.

• Late fees may only be imposed after providing notice to the owner that the assessment is overdue.

Administrative Law Judge’s Findings and Decision

The ALJ, Sondra J. Vanella, concluded that the Petitioner established by a preponderance of the evidence that the Respondent violated the CC&Rs.

Findings of Fact

1. Fault of Respondent: The ALJ found that the lack of receipt was due to the “abrupt change in management companies” and not any error by the Petitioner.

2. Timeliness: Because the Petitioner initiated payment by January 31 (the date the HOA considered payments “past due”), and sent it to the only address she had been officially provided at the time of the bill’s issuance, the payment was considered timely.

3. Communication Failures: The Respondent failed to respond to the Petitioner’s April 2025 email and did not notify her of the missing payment until the April statement. The ALJ noted it was “reasonable for Petitioner to have attempted to communicate via the portal in April 2025.”

Final Order

• Affirmation: The Petition was affirmed.

• Fee Removal: Respondent was ordered to remove the $20.00 in delinquency fees from Petitioner’s account.

• Reimbursement: Respondent was ordered to reimburse Petitioner for the $500.00 filing fee.

• Compliance: Respondent was directed to comply with CC&R Article 6.9.1 moving forward.

Post-Hearing Developments

On February 4, 2026, the Petitioner filed an inquiry with the Office of Administrative Hearings (OAH) stating that the HOA was not responding to her requests for the $500.00 payment ordered by the Judge. The OAH issued a Minute Entry stating it could not provide legal advice or take further action regarding a “writ of execution,” as its jurisdiction ended with the issuance of the final order.

Study Guide: Virginia Kostman v. Bella Tierra Community Association

This study guide provides a comprehensive review of the administrative hearing and subsequent legal decision regarding Case No. 25F-H084-REL. It examines the nuances of community association management, the application of Covenants, Conditions, and Restrictions (CC&Rs), and the procedural mechanics of the Arizona Office of Administrative Hearings.

Part 1: Short-Answer Quiz

Instructions: Answer the following questions in 2-3 sentences based on the provided source context.

1. What specific violation did the Petitioner allege against the Bella Tierra Community Association?

2. How did the timing of Platinum Management’s closure affect the January 2025 assessment payments?

3. What is the legal “burden of proof” in this administrative matter, and who was responsible for meeting it?

4. What was the distinction made by the Respondent’s witness between an “HOA late fee” and a “delinquency fee”?

5. On what date did the Petitioner initiate her bank payment, and why was this date significant to the Respondent’s argument?

6. Why did the Respondent claim they never received the Petitioner’s April 3, 2025, communication?

7. What was the Petitioner’s primary concern regarding her “delinquent” status beyond the $20 fee?

8. What did the Administrative Law Judge (ALJ) determine regarding the responsibility of the management transition?

9. What was the final order regarding the $500 filing fee and the delinquency fees?

10. How did the ALJ respond to the Petitioner’s February 4, 2026, inquiry regarding a “writ of execution”?

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Part 2: Answer Key

1. The Petitioner alleged that the Respondent violated CC&R Article 6.9.1 by failing to deposit her timely assessment payment and subsequently assessing improper delinquency and late fees. She argued that the management company returned her check without notification and refused to communicate for months despite her efforts to resolve the issue.

2. Platinum Management mailed the January 2025 billings in December 2024 but abruptly closed on December 17, 2024, shortly after the invoices were sent. Because the bills contained the old address for Platinum, payments sent by homeowners were returned or destroyed, as the new company, Agave Management, did not have a forwarding system fully in place at that time.

3. The burden of proof was upon the Petitioner, Virginia Kostman, to establish her case by a “preponderance of the evidence.” This standard requires the Petitioner to show that the facts she seeks to prove are more probable than not.

4. Sarah Malovich testified that a late fee is a penalty for delinquent assessments allowed by state statute and CC&Rs, which remains with the association as income. In contrast, a delinquency fee is a “pass-through” cost charged by the management company to the association to cover the expense of sending collection letters.

5. The Petitioner’s bank records showed the payment was initiated on January 31, 2025. The Respondent argued this was untimely because assessments were due January 1, while the ALJ eventually noted that the Association considered payments past due only after January 31, rendering the payment timely.

6. The Respondent claimed the management portal, Vanica, was brand new and not fully operational until April 1, 2025. Sarah Malovich testified that she never received the message and suggested that the transition from using QuickBooks to a formal portal may have caused communication gaps.

7. The Petitioner was concerned that being labeled “delinquent” would strip her of her right to vote during the transition of control from the builder to the homeowners. She argued that the management company was intentionally maintaining her delinquent status to exclude her from participating in the new HOA board elections.

8. The ALJ concluded that it was incumbent upon the Respondent to ensure no interruptions occurred during the management transition. Since the Respondent issued the billing with the Platinum Management address and did not notify residents of the change until January, the failure to receive the payment was not due to any error by the Petitioner.

9. The ALJ affirmed the Petitioner’s petition and ordered the Respondent to reimburse the $500 filing fee. Additionally, the Respondent was ordered to remove the delinquency fees from the Petitioner’s account and comply with CC&R 6.9.1 moving forward.

10. The ALJ issued a Minute Entry stating the office would not consider the inquiry because it was inappropriately sent to the OAH or no further action could be taken. The judge clarified that the Office of Administrative Hearings cannot provide legal advice to litigants.

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Part 3: Essay Questions

Instructions: Use the source materials to develop comprehensive responses to the following prompts. (No answers provided).

1. Systemic Failures in Management Transitions: Analyze how the transition from Platinum Management to Agave Management Solutions created a “perfect storm” of administrative errors. Discuss the responsibilities of a community association to maintain continuity of service and communication during a change in leadership.

2. The Interpretation of CC&R 6.9.1: Examine the language of Article 6.9.1 as provided in the judge’s decision. Evaluate how the specific wording regarding “notice” and “delinquency” applied to the facts of the Kostman case.

3. Good Faith vs. Strict Liability: The Respondent argued they acted in “good faith” and exercised “patience” by waving certain fees, while the Petitioner argued they acted in “bad faith” to prevent her from voting. Compare these two perspectives using evidence from the hearing transcripts.

4. Due Process in Administrative Hearings: Describe the procedural steps of the hearing as outlined by Judge Vanella, including the role of opening statements, witness testimony, cross-examination, and the admission of evidence. How do these procedures ensure a fair outcome for self-represented litigants?

5. Financial and Legal Remediation: Discuss the significance of the ALJ’s final order. Why is the reimbursement of a filing fee sometimes considered a more significant remedy than the removal of the original disputed fees?

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Part 4: Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over federal or state agency hearings, such as Sondra J. Vanella in this matter.

A.R.S. § 32-2199

The Arizona Revised Statute giving the Department of Real Estate jurisdiction to hear disputes between property owners and community associations.

Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and financial obligations of a planned community.

Delinquency Fee

A fee charged to an association by a management company for the administrative cost of sending past-due notices, often passed through to the homeowner.

Department of Real Estate

The state agency responsible for overseeing real estate licenses and homeowner association disputes in Arizona.

Late Fee

A penalty fee (limited to $15 or 10% of the assessment in this case) charged to an owner for failing to pay an assessment on time.

Minute Entry

A brief written record of a court’s or judge’s decision, order, or direction that does not constitute a full formal opinion.

Office of Administrative Hearings (OAH)

An independent agency authorized to conduct hearings for contested matters arising out of state regulation.

Petitioner

The party who files a petition or complaint; in this case, Virginia Kostman.

Preponderance of the Evidence

The standard of proof in civil cases, meaning the evidence shows that a fact is “more probable than not.”

Respondent

The party against whom a petition or complaint is filed; in this case, Bella Tierra Community Association.

Writ of Execution

A court order granted to put in force a judgment of possession obtained by a plaintiff from a court.

The $20 Fee That Cost $500: A Masterclass in Standing Up to HOA Bureaucracy

1. Introduction: The Homeowner’s Nightmare

Imagine doing everything right: you receive a bill, you mail your payment to the address provided, and you assume the matter is settled. Then, months later, you discover you have been labeled “delinquent.” You try to call; no one answers. You use the company’s own online portal to explain the situation, and your message vanishes into a digital black hole. While you are being ghosted, the fees continue to pile up.

This was the reality for Virginia Kostman, a homeowner in Tucson’s Bella Tierra community. What began as a routine quarterly assessment spiraled into a legal battle over a $20 “delinquency fee.” In a display of sheer investigative grit, Kostman paid a $500 filing fee to take her Homeowners Association (HOA) to the Arizona Office of Administrative Hearings. Her story is more than a dispute over pocket change; it is a masterclass in how to dismantle bureaucratic gaslighting and hold faceless management companies accountable.

2. Takeaway 1: You Aren’t Responsible for “Management Ghosting”

The conflict began during a chaotic shell game between management firms. In late 2024, Platinum Management—the company then representing the community—abruptly closed its doors on December 17th. This was a week after bills were sent but before the January 1st due date, effectively setting a trap for every resident who followed the instructions on their statement.

A “new” firm, Agave Management Solutions, took over in January 2025. Investigative scrutiny reveals the players didn’t actually change: Agave was founded by Jaimie Petty, who had been the executive assistant to the owner of the defunct Platinum Management. Despite this “same players, different name” reality, Agave penalized Kostman because her check arrived at Platinum’s shuttered office. Administrative Law Judge Sondra J. Vanella ruled that the burden of business continuity rests on the HOA, not the resident.

3. Takeaway 2: The “Portal” is a Digital Shield for Incompetence

When Kostman realized her payment hadn’t been processed, she attempted to use Agave’s online portal to resolve the issue. On April 3rd, she sent an email through the site. Agave’s Chief Financial Officer, Sarah Malovich, later testified that the company never received the message because the company was “still getting up and running.”

The investigative “smoking gun” lies in the contradiction of Malovich’s own testimony. She claimed the portal went live on April 1st, yet suggested a message sent two days later on April 3rd vanished because of technical infancy. Agave created a digital black hole, then penalized a homeowner for falling into it. This discrepancy highlights a systemic HOA tactic: using “new technology” as a shield for administrative incompetence while continuing to issue automated delinquency notices.

4. Takeaway 3: “Delinquency” is a Political Tool, Not Just a Financial One

The most alarming revelation from the hearing transcripts is that this $20 fee was a gatekeeping mechanism. The Bella Tierra HOA was transitioning from “builder control” (KB Homes) to homeowner control. Under the community’s governing documents (CC&R 6.9.1), any homeowner labeled as “delinquent” can be barred from voting for the new HOA board.

Kostman’s testimony revealed a struggle for democracy. She feared the Petty family—acting as agents for KB Homes—was using the $20 delinquency status to silence dissent and prevent homeowners from voting them out. This elevates the case from a petty fee dispute to a David vs. Goliath battle over community governance. When an HOA labels you delinquent over a disputed $20, they aren’t just taking your money; they are taking your voice.

5. Takeaway 4: The $500 Gamble for a $20 Injustice

To a casual observer, spending $500 to dispute $20 is a mathematical failure. To a consumer advocate, it is a strategic strike. By paying the filing fee for an Administrative Hearing, Kostman forced the HOA to hire expensive legal counsel and defend their “extortion racket” (as she termed it) in a court of record.

The gamble paid off. Judge Vanella didn’t just order the removal of the $20 delinquency fees; she ordered the HOA to reimburse Kostman for the $500 filing fee. By standing her ground, Kostman turned the tables, making the Association’s predatory administrative practices a net financial loss for them.

6. Takeaway 5: The Court’s Cold Shoulder: When a Win is Just a Piece of Paper

Winning in court is only half the battle; collecting the judgment is the other. A “Minute Entry” filed in February 2026—over a month after the final order—revealed that the HOA had still not paid the $500 reimbursement. When Kostman asked the court how to file a “writ of execution” to force payment, the court’s response was a chilling reminder of the limits of the legal system.

The Judge noted that the court could not provide legal advice and that Kostman’s inquiry “will not be considered.” This is the sobering reality of consumer litigation: even with a signed order from an Administrative Law Judge, a recalcitrant board can remain defiant, leaving the homeowner holding a “paper victory” while the HOA ignores the debt.

7. Conclusion: The Power of the Paper Trail

Virginia Kostman’s victory rested on a single, unassailable fact: she kept the receipts. She produced a bank bill-pay record initiated on January 31st, proving her intent to pay the address provided on the only official bill she had received. Without that digital and paper trail, the management company’s ledger would have been the final word.

In an era of shifting management companies and automated portals that “malfunction” at convenient times, are you keeping the records necessary to protect your home? As this case proves, a $20 fee isn’t always about the money—it’s about control. And as of February 2026, with the HOA still refusing to cut the check, the question remains: are you prepared for the long game required to actually get paid?

Case Participants

Petitioner Side

  • Virginia Kostman (Petitioner)
    Self-represented homeowner

Respondent Side

  • Eric P. O'Connor (Counsel)
    Gordon Rees Scully Mansukhani, LLP
    Attorney representing the Bella Tierra Community Association
  • Sarah Malovich (Witness)
    Agave Management Solutions
    Chief Financial Officer for the respondent's management company

Neutral Parties

  • Sondra J. Vanella (Administrative Law Judge)
    Office of Administrative Hearings
    Presiding judge over the matter