Category Archives: HOA Cases

Ronna Biesecker, v. 6100 Fifth Condominium Homeowners Association,

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Case Summary

Case ID 20F-H2020050-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-06-25
Administrative Law Judge Tammy L. Eigenheer
Outcome none
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Ronna Biesecker Counsel —
Respondent 6100 Fifth Condominium Homeowners Association Counsel —

Alleged Violations

A.R.S. § 33-1247 and CC&Rs § 10(c)

Outcome Summary

The Petitioner failed to establish by a preponderance of the evidence that the Respondent violated the CC&Rs or Arizona statutes; therefore, the petition was dismissed.

Why this result: Petitioner failed to meet the burden of proof, as evidence suggested the water leak was caused by the sliding glass door of the unit above, not a flaw in the common elements.

Key Issues & Findings

Failure to maintain all Common Elements (Water Leak Dispute)

Petitioner alleged the Respondent HOA failed to maintain Common Elements, leading to water leaks in her unit. Respondent denied the violation, asserting the leak originated from the upstairs unit’s sliding doors or track assemblies, which are the responsibility of that unit owner.

Orders: Petitioner’s petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1247
  • CC&Rs § 10(c)
  • Article II.E, Section 1 of the Bylaws
  • Article C of the CC&Rs

Analytics Highlights

Topics: condominium, maintenance dispute, common elements, water damage, burden of proof
Additional Citations:

  • A.R.S. § 33-1247
  • CC&Rs § 10(c)
  • A.R.S. § 32-2199.01
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • Powell v. Washburn
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs.
  • Vazanno v. Superior Court

Video Overview

Audio Overview

Decision Documents

20F-H2020050-REL Decision – 802352.pdf

Uploaded 2025-10-09T03:35:05 (103.2 KB)





Briefing Doc – 20F-H2020050-REL


Administrative Hearing Brief: Biesecker v. 6100 Fifth Condominium HOA

Executive Summary

This document provides a comprehensive analysis of the Administrative Law Judge Decision in case number 20F-H2020050-REL, wherein Petitioner Ronna Biesecker alleged that the 6100 Fifth Condominium Homeowners Association (HOA) failed to fulfill its maintenance responsibilities. The Administrative Law Judge (ALJ) ultimately dismissed the petition, ruling that the Petitioner did not meet the burden of proof required to substantiate her claim.

The central conflict involved recurring water leaks in Ms. Biesecker’s condominium unit (A113). The Petitioner contended that the leaks originated from cracks in the building’s exterior stucco, which are defined as “Common Elements” and are therefore the HOA’s responsibility to repair under its governing documents and Arizona state law. In contrast, the HOA argued that the source of the water was the sliding door assembly of the upstairs unit, making its maintenance the responsibility of that unit’s owner.

The final decision rested on the weight of evidence presented. Multiple expert inspections, conducted by Olander’s and another inspector retained by the HOA, concluded that the leaks were attributable to the upstairs unit’s sliding doors. This evidence was deemed more convincing than the Petitioner’s own assessment regarding the stucco. The ALJ concluded that Ms. Biesecker failed to prove by a “preponderance of the evidence” that the damage was caused by a flaw in the common elements, leading to the dismissal of her case.

Case Overview

Case Name

Ronna Biesecker, Petitioner, vs. 6100 Fifth Condominium Homeowners Association, Respondent.

Case Number

20F-H2020050-REL

Office of Administrative Hearings (Arizona)

Presiding Judge

Administrative Law Judge Tammy L. Eigenheer

Hearing Date

June 5, 2020

Decision Date

June 25, 2020

Petitioner

Ronna Biesecker, owner of unit A113

Respondent

6100 Fifth Condominium Homeowners Association, represented by Robert Eric Struse, Statutory Agent

Core Allegations and Defenses

Petitioner’s Claim (Ronna Biesecker)

• Core Allegation: The Petitioner filed a petition on March 10, 2020, alleging that the Respondent (HOA) violated its Covenants, Conditions, and Restrictions (CC&Rs) § 10(c) and Arizona Revised Statutes (A.R.S.) § 33-1247 by failing to maintain the common elements of the condominium community.

• Specifics of Claim: Ms. Biesecker asserted that persistent water leaks into her unit were caused by cracks in the exterior stucco surrounding the sliding doors.

• Basis of Responsibility: She argued that because the exterior stucco is a “common element,” the HOA was legally responsible for its repair and any subsequent damage to her unit.

• Requested Action: The Petitioner had previously requested that the HOA repair the exterior leaks and had attempted to have the HOA mediate the issue with the owner of the upstairs unit.

Respondent’s Position (6100 Fifth Condominium HOA)

• Core Defense: The HOA denied any violation of its CC&Rs or state statutes.

• Specifics of Defense: The HOA maintained that the source of the water leaks was not a common element. Instead, it attributed the leaks to the sliding doors or track assemblies of the condominium unit located directly above the Petitioner’s.

• Basis of Responsibility: According to the HOA’s governing documents and state law, the maintenance of elements belonging to an individual unit (such as a sliding door) is the responsibility of that unit’s owner, not the association.

• Actions Taken: The HOA declined to “arbitrate, mediate, or serve as a third party” in the dispute between the Petitioner and the owner of the upstairs unit. It also conducted an inspection which supported its position.

Evidentiary Timeline and Key Findings

The decision was based on a sequence of events and expert assessments presented as evidence.

• January 5, 2019: Petitioner experiences the first water leak in her unit (A113) near the sliding glass door.

• January 18, 2019: An employee from Olander’s, a door installation company contacted by the Petitioner, inspects the unit. The employee’s opinion was that “the leak was coming from the unit above Petitioner and that the sliding door above Petitioner’s unit had large gaps under the threshold which allowed water to get in.”

• February 8, 2019: Nathan’s Handyman Service repairs plaster damage in the Petitioner’s unit and notes in a report that the damage was “the result of an old leak coming from above Petitioner’s unit.” The report also identified rusted wire mesh, indicating previous repairs to the area.

• March/April 2019: The HOA’s Property Manager formally refuses the Petitioner’s request to mediate the dispute with the owner of the upstairs unit.

• May 1, 2019: Petitioner emails the HOA, proposing that new cracks in the stucco pop-out at the roof level could be the source of the leak.

• October 28, 2019: A “Roof Opinion Report” from Roof Savers Locke Roofing states that no roof repairs are needed but notes the presence of “server [sic] cracking at the stucco.” The report recommends contacting a stucco or window contractor.

• November 27, 2019: Another leak occurs in the same area of the Petitioner’s unit.

• December 9, 2019: The HOA’s Property Manager and an inspector assess the water damage in the Petitioner’s unit.

• December 23, 2019: An invoice from the inspector states: “After inspecting the shared roof and building interior/exterior it appears the water damage to the lower unit is coming from the upstairs unit sliding doors or their track assemblies.”

• June 5, 2020 (Hearing Testimony):

◦ The Petitioner stated it was “obvious” the leak originated from the stucco crack.

◦ The HOA’s Statutory Agent, Robert Eric Struse, testified that the December 2019 inspection included the interior of the upstairs unit. He argued that if the stucco crack were the cause, the upstairs unit would also show internal water damage, which it did not.

Governing Documents and Statutes

The case revolved around the interpretation of responsibility as defined by the following legal framework:

• Bylaws (Article II.E, Section 1) & CC&Rs (Article C): These documents obligate the HOA to collect assessments to meet common expenses, including the “maintenance, upkeep, care, repair, [and] reconstruction… for the common elements.”

• A.R.S. § 33-1247: This Arizona statute codifies the division of maintenance responsibility. It states that “the association is responsible for maintenance, repair and replacement of the common elements and each unit owner is responsible for maintenance, repair and replacement of the unit.”

Conclusions of Law and Final Order

The Administrative Law Judge’s decision was based on the application of the legal standard of proof to the evidence presented.

• Burden of Proof: The ALJ established that the Petitioner bore the burden of proof to demonstrate, by a “preponderance of the evidence,” that the HOA violated the applicable statutes or CC&Rs. A preponderance of the evidence is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

• Central Legal Finding: The judge determined that if the water damage was caused by a flaw in the common elements, the HOA would be responsible. However, the Petitioner failed to meet her burden of proof in establishing this causal link.

• Reasoning for Decision: The ruling states: “Petitioner failed to establish by a preponderance of the evidence that the water leak and damage was attributable to the condition of the common elements. Rather, the opinions of the companies that inspected the area concluded that the leak was coming from the sliding glass door of the unit above Petitioner’s.” The collective weight of the expert opinions from Olander’s and the HOA’s inspector outweighed the Petitioner’s personal theory about the stucco cracks.

• Final Order: Based on these findings, the judge issued a final order: “IT IS ORDERED that Petitioner’s petition is dismissed.” This order is binding unless a rehearing is granted.






Study Guide – 20F-H2020050-REL


Study Guide: Biesecker v. 6100 Fifth Condominium Homeowners Association

This guide provides a comprehensive review of the Administrative Law Judge Decision in case No. 20F-H2020050-REL, concerning a dispute between condominium owner Ronna Biesecker and the 6100 Fifth Condominium Homeowners Association. The case centers on determining responsibility for water leaks affecting the Petitioner’s unit. Use the following sections to test and deepen your understanding of the facts, legal arguments, and final outcome.

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Short-Answer Quiz

Answer the following questions in 2-3 complete sentences, using only information provided in the case document.

1. Who were the Petitioner and Respondent in this case, and what was their relationship?

2. What was the central claim made by the Petitioner against the Respondent?

3. According to the Respondent, what was the source of the water leaks and who was responsible for the repair?

4. What legal standard, or “burden of proof,” did the Petitioner need to meet to win her case?

5. What two key community documents, in addition to Arizona state law, define the Respondent’s responsibility for maintaining “common elements”?

6. Summarize the findings of the two inspection reports mentioned in the evidence (from Olander’s and the December 23, 2019 invoice).

7. What was the Petitioner’s theory about the source of the leak, as stated during the hearing?

8. How did Robert Eric Struse, the Respondent’s Statutory Agent, counter the Petitioner’s theory about the stucco crack?

9. What was the final ruling, or “Order,” issued by the Administrative Law Judge?

10. Why did the Administrative Law Judge conclude that the Petitioner failed to meet her burden of proof?

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Answer Key

1. The Petitioner was Ronna Biesecker, who owned condominium unit A113. The Respondent was the 6100 Fifth Condominium Homeowners Association, of which the Petitioner was a member.

2. The Petitioner filed a petition alleging the Respondent violated its CC&Rs (§ 10(c)) and Arizona statute A.R.S. § 33-1247 by failing to maintain the common elements, which she believed were the source of water leaks in her unit.

3. The Respondent argued that the source of the water leaks was the upstairs unit’s sliding doors or track assemblies. Therefore, the responsibility for maintenance and repair belonged to the owner of that specific unit, not the Homeowners Association.

4. The Petitioner had the burden of proof to establish her claim by a “preponderance of the evidence.” This legal standard requires providing proof that convinces the trier of fact that the contention is more probably true than not.

5. The Respondent’s responsibility is defined in Article II.E, Section 1 of the community Bylaws and Section C of the CC&Rs. Both documents state the association is responsible for the maintenance and repair of common elements using assessments paid by owners.

6. An employee from Olander’s opined that the leak was coming from the unit above Petitioner’s, specifically from large gaps under the sliding door’s threshold. Similarly, the inspector’s invoice from December 23, 2019, concluded that the water damage appeared to be coming from the upstairs unit’s sliding doors or their track assemblies.

7. During the hearing, the Petitioner stated that it was “obvious” the leak was coming from a crack in the stucco in the pop-out surrounding the sliding doors at the roof level. She posited this was a common element and therefore the Respondent’s responsibility to repair.

8. Mr. Struse testified that if water were leaking through the crack in the stucco, the upstairs unit would have also sustained internal damage. He confirmed that an inspection of the inside of the upstairs unit showed this was not happening, undermining the Petitioner’s theory.

9. The Administrative Law Judge ordered that the Petitioner’s petition be dismissed.

10. The judge concluded the Petitioner failed to meet her burden of proof because the credible evidence, particularly the opinions of the companies that inspected the area, concluded the leak was coming from the sliding glass door of the unit above. The Petitioner did not establish by a preponderance of the evidence that the leak was attributable to the condition of the common elements.

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Essay Questions

The following questions are designed for longer-form analysis. Formulate a detailed response for each, citing specific evidence and legal principles from the case document to support your arguments.

1. Analyze the distinction between “common elements” and an individual “unit” as defined by A.R.S. § 33-1247 and the community’s governing documents. How was this distinction central to the judge’s final decision in this case?

2. Discuss the role and weight of evidence presented during the hearing. Compare the Petitioner’s testimony and personal observations with the professional opinions from Olander’s and the inspector. Why did the judge find the professional opinions more convincing in determining the outcome?

3. Explain the legal standard of “preponderance of the evidence” as defined in the case document’s Conclusions of Law. Using specific examples from the hearing evidence, detail why Ronna Biesecker failed to meet this standard.

4. Based on the referenced community documents, what are the primary maintenance responsibilities of the 6100 Fifth Condominium Homeowners Association? How did the Respondent’s stated refusal to “arbitrate, mediate, or serve as a third party” in the dispute between unit owners align with or diverge from these responsibilities?

5. Imagine you are advising the Petitioner before the hearing. What additional evidence or types of expert testimony could she have presented to potentially change the outcome of the case and successfully prove the leak was the Respondent’s responsibility?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official (Tammy L. Eigenheer) from the Office of Administrative Hearings who presides over the evidentiary hearing and issues a legally binding decision and order.

A.R.S. (Arizona Revised Statutes)

The codified laws of the state of Arizona. The statutes referenced (e.g., § 33-1247) govern the responsibilities of condominium associations and the legal procedures for disputes.

Bylaws

A set of rules governing the internal operations of an organization. In this case, Article II.E, Section 1 of the Bylaws obligates the Association to maintain the common elements using assessments paid by owners.

CC&Rs (Covenants, Conditions, and Restrictions)

A legal document that outlines the rights and obligations of property owners and the homeowners association. Section C of the CC&Rs required the Association to maintain, repair, and care for the common elements.

Common Elements

Areas of the condominium property for which the homeowners association is responsible for maintenance, upkeep, care, and repair, as distinguished from an individual owner’s unit.

Petitioner

The party who initiates a legal action by filing a petition. In this case, Ronna Biesecker, the condominium owner who alleged the homeowners association violated its duties.

Preponderance of the Evidence

The standard of proof required in this hearing. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not” and is established by evidence with the most convincing force.

Respondent

The party against whom a petition is filed. In this case, the 6100 Fifth Condominium Homeowners Association.

Statutory Agent

An individual designated to receive legal notices and appear on behalf of a business entity. In this case, Robert Eric Struse appeared and testified on behalf of the Respondent association.






Blog Post – 20F-H2020050-REL


Your HOA Isn’t Your Landlord: 3 Surprising Lessons from a Condo Water Leak Lawsuit

Introduction: The Dreaded Drip

It’s a scenario that strikes fear into the heart of any condo owner: the tell-tale stain on the ceiling, the damp spot on the wall, the dreaded drip of a mysterious water leak. The immediate anxiety is followed by a pressing question: “Who is responsible for fixing this, and who pays for the damage?” Many assume the answer is straightforward, but as a recent lawsuit involving the 6100 Fifth Condominium Homeowners Association demonstrates, the lines of responsibility in a condominium community are often more complicated than they appear.

This article explores a real-life court case between a condo owner and her HOA to uncover three surprising truths about condo ownership, liability, and the true role of your HOA.

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1. It’s Not Where the Damage Is, It’s Where the Leak Starts

In the case, condo owner Ronna Biesecker experienced persistent water leaks in her unit (A113) around her sliding glass door. On May 1, 2019, after observing new cracks in the exterior stucco, she “posited that the cracks could be a source of the leak.” This became the foundation of her claim: if the water was coming from the stucco—a “Common Element”—then the HOA was responsible for the repairs.

However, a year-long trail of evidence pointed in a different direction. As early as January 18, 2019, an employee from the door installation company opined that the leak was “coming from the unit above.” On February 8, 2019, a handyman repairing plaster damage stated the issue was from “an old leak coming from above.” Even a roofing report from October 28, 2019, which noted the stucco cracking, stopped short of blaming it, instead recommending the owner contact a “stucco contractor or Window Company.”

This evidence culminated in a formal inspector’s report on December 23, 2019, which concluded the water was “coming from the upstairs unit sliding doors or their track assemblies.” Because the source of the leak originated from a part of the neighbor’s private unit, the legal responsibility shifted. Based on Arizona statute A.R.S. § 33-1247, the HOA was not liable. The key lesson here is unambiguous: legal responsibility follows the source of the problem, not the location of the resulting damage.

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2. “More Probably True Than Not”: The Burden of Proof Is on You

In any lawsuit, the person bringing the complaint—in this case, the homeowner—carries the “burden of proof.” This means she had to provide enough evidence to meet a specific legal standard, which the court defined as “preponderance of the evidence.” The legal decision offers a clear definition of this standard:

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

In simple terms, Ms. Biesecker had to convince the judge that her theory—that the leak came from the common element stucco—was more likely to be true than the HOA’s theory that it came from the neighbor’s door.

Her claim was undone by simple logic. The HOA’s Statutory Agent, Mr. Struse, provided devastating testimony, arguing that “if water was leaking through the crack in the stucco, the upstairs unit would have also had internal damage, which was not happening.” This single point made the petitioner’s theory far less probable. The judge ultimately ruled that the petitioner “failed to establish by a preponderance of the evidence that Respondent violated the provisions of the CC&Rs or Arizona statutes,” proving that an owner’s belief isn’t enough without convincing evidence.

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3. Your HOA Won’t (and Often Can’t) Settle Neighbor-to-Neighbor Fights

Before filing the lawsuit, the petitioner attempted to resolve the issue directly. On or about February 11, 2019, she contacted the owner of the unit above hers to request repairs but “did not receive a response.” Frustrated, she turned to the HOA for help. In March or April 2019, she asked the Property Manager to “help mediate the issue” between her and her neighbor.

The HOA’s response was direct and legally sound: the Property Manager “responded that it would not arbitrate, mediate, or serve as a third party to the dispute.” This is a crucial and often misunderstood takeaway for condo owners. While an HOA’s role is to manage common elements and enforce community-wide rules, it is not legally obligated—and often not permitted—to intervene in private disputes between two homeowners over damage originating from private property. Your HOA is not a landlord or a mediator for personal conflicts; it’s an administrative body with a specific and legally defined scope of authority.

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Conclusion: Know Your Lines

The lessons from this case are clear: condo living involves a complex web of overlapping responsibilities. The line between what constitutes a common element, your private property, and your neighbor’s property is legally significant and determines who is ultimately responsible when things go wrong. Understanding these distinctions isn’t just helpful—it’s essential for protecting your investment and resolving issues effectively.

Before the next problem arises, have you read your community documents to know exactly where your responsibility ends and your neighbor’s begins?


Case Participants

Petitioner Side

  • Ronna Biesecker (petitioner)
    Appeared and testified on her own behalf.

Respondent Side

  • Robert Eric Struse (statutory agent)
    6100 Fifth Condominium Homeowners Association
    Appeared and presented testimony on behalf of Respondent.

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate

Ronna Biesecker, v. 6100 Fifth Condominium Homeowners Association,

Posted on by

Case Summary

Case ID 20F-H2020050-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-06-25
Administrative Law Judge Tammy L. Eigenheer
Outcome none
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Ronna Biesecker Counsel —
Respondent 6100 Fifth Condominium Homeowners Association Counsel —

Alleged Violations

A.R.S. § 33-1247 and CC&Rs § 10(c)

Outcome Summary

The Petitioner failed to establish by a preponderance of the evidence that the Respondent violated the CC&Rs or Arizona statutes; therefore, the petition was dismissed.

Why this result: Petitioner failed to meet the burden of proof, as evidence suggested the water leak was caused by the sliding glass door of the unit above, not a flaw in the common elements.

Key Issues & Findings

Failure to maintain all Common Elements (Water Leak Dispute)

Petitioner alleged the Respondent HOA failed to maintain Common Elements, leading to water leaks in her unit. Respondent denied the violation, asserting the leak originated from the upstairs unit’s sliding doors or track assemblies, which are the responsibility of that unit owner.

Orders: Petitioner’s petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1247
  • CC&Rs § 10(c)
  • Article II.E, Section 1 of the Bylaws
  • Article C of the CC&Rs

Analytics Highlights

Topics: condominium, maintenance dispute, common elements, water damage, burden of proof
Additional Citations:

  • A.R.S. § 33-1247
  • CC&Rs § 10(c)
  • A.R.S. § 32-2199.01
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • Powell v. Washburn
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs.
  • Vazanno v. Superior Court

Video Overview

Audio Overview

Decision Documents

20F-H2020050-REL Decision – 802352.pdf

Uploaded 2026-01-23T17:32:09 (103.2 KB)





Briefing Doc – 20F-H2020050-REL


Administrative Hearing Brief: Biesecker v. 6100 Fifth Condominium HOA

Executive Summary

This document provides a comprehensive analysis of the Administrative Law Judge Decision in case number 20F-H2020050-REL, wherein Petitioner Ronna Biesecker alleged that the 6100 Fifth Condominium Homeowners Association (HOA) failed to fulfill its maintenance responsibilities. The Administrative Law Judge (ALJ) ultimately dismissed the petition, ruling that the Petitioner did not meet the burden of proof required to substantiate her claim.

The central conflict involved recurring water leaks in Ms. Biesecker’s condominium unit (A113). The Petitioner contended that the leaks originated from cracks in the building’s exterior stucco, which are defined as “Common Elements” and are therefore the HOA’s responsibility to repair under its governing documents and Arizona state law. In contrast, the HOA argued that the source of the water was the sliding door assembly of the upstairs unit, making its maintenance the responsibility of that unit’s owner.

The final decision rested on the weight of evidence presented. Multiple expert inspections, conducted by Olander’s and another inspector retained by the HOA, concluded that the leaks were attributable to the upstairs unit’s sliding doors. This evidence was deemed more convincing than the Petitioner’s own assessment regarding the stucco. The ALJ concluded that Ms. Biesecker failed to prove by a “preponderance of the evidence” that the damage was caused by a flaw in the common elements, leading to the dismissal of her case.

Case Overview

Case Name

Ronna Biesecker, Petitioner, vs. 6100 Fifth Condominium Homeowners Association, Respondent.

Case Number

20F-H2020050-REL

Office of Administrative Hearings (Arizona)

Presiding Judge

Administrative Law Judge Tammy L. Eigenheer

Hearing Date

June 5, 2020

Decision Date

June 25, 2020

Petitioner

Ronna Biesecker, owner of unit A113

Respondent

6100 Fifth Condominium Homeowners Association, represented by Robert Eric Struse, Statutory Agent

Core Allegations and Defenses

Petitioner’s Claim (Ronna Biesecker)

• Core Allegation: The Petitioner filed a petition on March 10, 2020, alleging that the Respondent (HOA) violated its Covenants, Conditions, and Restrictions (CC&Rs) § 10(c) and Arizona Revised Statutes (A.R.S.) § 33-1247 by failing to maintain the common elements of the condominium community.

• Specifics of Claim: Ms. Biesecker asserted that persistent water leaks into her unit were caused by cracks in the exterior stucco surrounding the sliding doors.

• Basis of Responsibility: She argued that because the exterior stucco is a “common element,” the HOA was legally responsible for its repair and any subsequent damage to her unit.

• Requested Action: The Petitioner had previously requested that the HOA repair the exterior leaks and had attempted to have the HOA mediate the issue with the owner of the upstairs unit.

Respondent’s Position (6100 Fifth Condominium HOA)

• Core Defense: The HOA denied any violation of its CC&Rs or state statutes.

• Specifics of Defense: The HOA maintained that the source of the water leaks was not a common element. Instead, it attributed the leaks to the sliding doors or track assemblies of the condominium unit located directly above the Petitioner’s.

• Basis of Responsibility: According to the HOA’s governing documents and state law, the maintenance of elements belonging to an individual unit (such as a sliding door) is the responsibility of that unit’s owner, not the association.

• Actions Taken: The HOA declined to “arbitrate, mediate, or serve as a third party” in the dispute between the Petitioner and the owner of the upstairs unit. It also conducted an inspection which supported its position.

Evidentiary Timeline and Key Findings

The decision was based on a sequence of events and expert assessments presented as evidence.

• January 5, 2019: Petitioner experiences the first water leak in her unit (A113) near the sliding glass door.

• January 18, 2019: An employee from Olander’s, a door installation company contacted by the Petitioner, inspects the unit. The employee’s opinion was that “the leak was coming from the unit above Petitioner and that the sliding door above Petitioner’s unit had large gaps under the threshold which allowed water to get in.”

• February 8, 2019: Nathan’s Handyman Service repairs plaster damage in the Petitioner’s unit and notes in a report that the damage was “the result of an old leak coming from above Petitioner’s unit.” The report also identified rusted wire mesh, indicating previous repairs to the area.

• March/April 2019: The HOA’s Property Manager formally refuses the Petitioner’s request to mediate the dispute with the owner of the upstairs unit.

• May 1, 2019: Petitioner emails the HOA, proposing that new cracks in the stucco pop-out at the roof level could be the source of the leak.

• October 28, 2019: A “Roof Opinion Report” from Roof Savers Locke Roofing states that no roof repairs are needed but notes the presence of “server [sic] cracking at the stucco.” The report recommends contacting a stucco or window contractor.

• November 27, 2019: Another leak occurs in the same area of the Petitioner’s unit.

• December 9, 2019: The HOA’s Property Manager and an inspector assess the water damage in the Petitioner’s unit.

• December 23, 2019: An invoice from the inspector states: “After inspecting the shared roof and building interior/exterior it appears the water damage to the lower unit is coming from the upstairs unit sliding doors or their track assemblies.”

• June 5, 2020 (Hearing Testimony):

◦ The Petitioner stated it was “obvious” the leak originated from the stucco crack.

◦ The HOA’s Statutory Agent, Robert Eric Struse, testified that the December 2019 inspection included the interior of the upstairs unit. He argued that if the stucco crack were the cause, the upstairs unit would also show internal water damage, which it did not.

Governing Documents and Statutes

The case revolved around the interpretation of responsibility as defined by the following legal framework:

• Bylaws (Article II.E, Section 1) & CC&Rs (Article C): These documents obligate the HOA to collect assessments to meet common expenses, including the “maintenance, upkeep, care, repair, [and] reconstruction… for the common elements.”

• A.R.S. § 33-1247: This Arizona statute codifies the division of maintenance responsibility. It states that “the association is responsible for maintenance, repair and replacement of the common elements and each unit owner is responsible for maintenance, repair and replacement of the unit.”

Conclusions of Law and Final Order

The Administrative Law Judge’s decision was based on the application of the legal standard of proof to the evidence presented.

• Burden of Proof: The ALJ established that the Petitioner bore the burden of proof to demonstrate, by a “preponderance of the evidence,” that the HOA violated the applicable statutes or CC&Rs. A preponderance of the evidence is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

• Central Legal Finding: The judge determined that if the water damage was caused by a flaw in the common elements, the HOA would be responsible. However, the Petitioner failed to meet her burden of proof in establishing this causal link.

• Reasoning for Decision: The ruling states: “Petitioner failed to establish by a preponderance of the evidence that the water leak and damage was attributable to the condition of the common elements. Rather, the opinions of the companies that inspected the area concluded that the leak was coming from the sliding glass door of the unit above Petitioner’s.” The collective weight of the expert opinions from Olander’s and the HOA’s inspector outweighed the Petitioner’s personal theory about the stucco cracks.

• Final Order: Based on these findings, the judge issued a final order: “IT IS ORDERED that Petitioner’s petition is dismissed.” This order is binding unless a rehearing is granted.






Study Guide – 20F-H2020050-REL


Study Guide: Biesecker v. 6100 Fifth Condominium Homeowners Association

This guide provides a comprehensive review of the Administrative Law Judge Decision in case No. 20F-H2020050-REL, concerning a dispute between condominium owner Ronna Biesecker and the 6100 Fifth Condominium Homeowners Association. The case centers on determining responsibility for water leaks affecting the Petitioner’s unit. Use the following sections to test and deepen your understanding of the facts, legal arguments, and final outcome.

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Short-Answer Quiz

Answer the following questions in 2-3 complete sentences, using only information provided in the case document.

1. Who were the Petitioner and Respondent in this case, and what was their relationship?

2. What was the central claim made by the Petitioner against the Respondent?

3. According to the Respondent, what was the source of the water leaks and who was responsible for the repair?

4. What legal standard, or “burden of proof,” did the Petitioner need to meet to win her case?

5. What two key community documents, in addition to Arizona state law, define the Respondent’s responsibility for maintaining “common elements”?

6. Summarize the findings of the two inspection reports mentioned in the evidence (from Olander’s and the December 23, 2019 invoice).

7. What was the Petitioner’s theory about the source of the leak, as stated during the hearing?

8. How did Robert Eric Struse, the Respondent’s Statutory Agent, counter the Petitioner’s theory about the stucco crack?

9. What was the final ruling, or “Order,” issued by the Administrative Law Judge?

10. Why did the Administrative Law Judge conclude that the Petitioner failed to meet her burden of proof?

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Answer Key

1. The Petitioner was Ronna Biesecker, who owned condominium unit A113. The Respondent was the 6100 Fifth Condominium Homeowners Association, of which the Petitioner was a member.

2. The Petitioner filed a petition alleging the Respondent violated its CC&Rs (§ 10(c)) and Arizona statute A.R.S. § 33-1247 by failing to maintain the common elements, which she believed were the source of water leaks in her unit.

3. The Respondent argued that the source of the water leaks was the upstairs unit’s sliding doors or track assemblies. Therefore, the responsibility for maintenance and repair belonged to the owner of that specific unit, not the Homeowners Association.

4. The Petitioner had the burden of proof to establish her claim by a “preponderance of the evidence.” This legal standard requires providing proof that convinces the trier of fact that the contention is more probably true than not.

5. The Respondent’s responsibility is defined in Article II.E, Section 1 of the community Bylaws and Section C of the CC&Rs. Both documents state the association is responsible for the maintenance and repair of common elements using assessments paid by owners.

6. An employee from Olander’s opined that the leak was coming from the unit above Petitioner’s, specifically from large gaps under the sliding door’s threshold. Similarly, the inspector’s invoice from December 23, 2019, concluded that the water damage appeared to be coming from the upstairs unit’s sliding doors or their track assemblies.

7. During the hearing, the Petitioner stated that it was “obvious” the leak was coming from a crack in the stucco in the pop-out surrounding the sliding doors at the roof level. She posited this was a common element and therefore the Respondent’s responsibility to repair.

8. Mr. Struse testified that if water were leaking through the crack in the stucco, the upstairs unit would have also sustained internal damage. He confirmed that an inspection of the inside of the upstairs unit showed this was not happening, undermining the Petitioner’s theory.

9. The Administrative Law Judge ordered that the Petitioner’s petition be dismissed.

10. The judge concluded the Petitioner failed to meet her burden of proof because the credible evidence, particularly the opinions of the companies that inspected the area, concluded the leak was coming from the sliding glass door of the unit above. The Petitioner did not establish by a preponderance of the evidence that the leak was attributable to the condition of the common elements.

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Essay Questions

The following questions are designed for longer-form analysis. Formulate a detailed response for each, citing specific evidence and legal principles from the case document to support your arguments.

1. Analyze the distinction between “common elements” and an individual “unit” as defined by A.R.S. § 33-1247 and the community’s governing documents. How was this distinction central to the judge’s final decision in this case?

2. Discuss the role and weight of evidence presented during the hearing. Compare the Petitioner’s testimony and personal observations with the professional opinions from Olander’s and the inspector. Why did the judge find the professional opinions more convincing in determining the outcome?

3. Explain the legal standard of “preponderance of the evidence” as defined in the case document’s Conclusions of Law. Using specific examples from the hearing evidence, detail why Ronna Biesecker failed to meet this standard.

4. Based on the referenced community documents, what are the primary maintenance responsibilities of the 6100 Fifth Condominium Homeowners Association? How did the Respondent’s stated refusal to “arbitrate, mediate, or serve as a third party” in the dispute between unit owners align with or diverge from these responsibilities?

5. Imagine you are advising the Petitioner before the hearing. What additional evidence or types of expert testimony could she have presented to potentially change the outcome of the case and successfully prove the leak was the Respondent’s responsibility?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official (Tammy L. Eigenheer) from the Office of Administrative Hearings who presides over the evidentiary hearing and issues a legally binding decision and order.

A.R.S. (Arizona Revised Statutes)

The codified laws of the state of Arizona. The statutes referenced (e.g., § 33-1247) govern the responsibilities of condominium associations and the legal procedures for disputes.

Bylaws

A set of rules governing the internal operations of an organization. In this case, Article II.E, Section 1 of the Bylaws obligates the Association to maintain the common elements using assessments paid by owners.

CC&Rs (Covenants, Conditions, and Restrictions)

A legal document that outlines the rights and obligations of property owners and the homeowners association. Section C of the CC&Rs required the Association to maintain, repair, and care for the common elements.

Common Elements

Areas of the condominium property for which the homeowners association is responsible for maintenance, upkeep, care, and repair, as distinguished from an individual owner’s unit.

Petitioner

The party who initiates a legal action by filing a petition. In this case, Ronna Biesecker, the condominium owner who alleged the homeowners association violated its duties.

Preponderance of the Evidence

The standard of proof required in this hearing. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not” and is established by evidence with the most convincing force.

Respondent

The party against whom a petition is filed. In this case, the 6100 Fifth Condominium Homeowners Association.

Statutory Agent

An individual designated to receive legal notices and appear on behalf of a business entity. In this case, Robert Eric Struse appeared and testified on behalf of the Respondent association.






Blog Post – 20F-H2020050-REL


Your HOA Isn’t Your Landlord: 3 Surprising Lessons from a Condo Water Leak Lawsuit

Introduction: The Dreaded Drip

It’s a scenario that strikes fear into the heart of any condo owner: the tell-tale stain on the ceiling, the damp spot on the wall, the dreaded drip of a mysterious water leak. The immediate anxiety is followed by a pressing question: “Who is responsible for fixing this, and who pays for the damage?” Many assume the answer is straightforward, but as a recent lawsuit involving the 6100 Fifth Condominium Homeowners Association demonstrates, the lines of responsibility in a condominium community are often more complicated than they appear.

This article explores a real-life court case between a condo owner and her HOA to uncover three surprising truths about condo ownership, liability, and the true role of your HOA.

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1. It’s Not Where the Damage Is, It’s Where the Leak Starts

In the case, condo owner Ronna Biesecker experienced persistent water leaks in her unit (A113) around her sliding glass door. On May 1, 2019, after observing new cracks in the exterior stucco, she “posited that the cracks could be a source of the leak.” This became the foundation of her claim: if the water was coming from the stucco—a “Common Element”—then the HOA was responsible for the repairs.

However, a year-long trail of evidence pointed in a different direction. As early as January 18, 2019, an employee from the door installation company opined that the leak was “coming from the unit above.” On February 8, 2019, a handyman repairing plaster damage stated the issue was from “an old leak coming from above.” Even a roofing report from October 28, 2019, which noted the stucco cracking, stopped short of blaming it, instead recommending the owner contact a “stucco contractor or Window Company.”

This evidence culminated in a formal inspector’s report on December 23, 2019, which concluded the water was “coming from the upstairs unit sliding doors or their track assemblies.” Because the source of the leak originated from a part of the neighbor’s private unit, the legal responsibility shifted. Based on Arizona statute A.R.S. § 33-1247, the HOA was not liable. The key lesson here is unambiguous: legal responsibility follows the source of the problem, not the location of the resulting damage.

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2. “More Probably True Than Not”: The Burden of Proof Is on You

In any lawsuit, the person bringing the complaint—in this case, the homeowner—carries the “burden of proof.” This means she had to provide enough evidence to meet a specific legal standard, which the court defined as “preponderance of the evidence.” The legal decision offers a clear definition of this standard:

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

In simple terms, Ms. Biesecker had to convince the judge that her theory—that the leak came from the common element stucco—was more likely to be true than the HOA’s theory that it came from the neighbor’s door.

Her claim was undone by simple logic. The HOA’s Statutory Agent, Mr. Struse, provided devastating testimony, arguing that “if water was leaking through the crack in the stucco, the upstairs unit would have also had internal damage, which was not happening.” This single point made the petitioner’s theory far less probable. The judge ultimately ruled that the petitioner “failed to establish by a preponderance of the evidence that Respondent violated the provisions of the CC&Rs or Arizona statutes,” proving that an owner’s belief isn’t enough without convincing evidence.

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3. Your HOA Won’t (and Often Can’t) Settle Neighbor-to-Neighbor Fights

Before filing the lawsuit, the petitioner attempted to resolve the issue directly. On or about February 11, 2019, she contacted the owner of the unit above hers to request repairs but “did not receive a response.” Frustrated, she turned to the HOA for help. In March or April 2019, she asked the Property Manager to “help mediate the issue” between her and her neighbor.

The HOA’s response was direct and legally sound: the Property Manager “responded that it would not arbitrate, mediate, or serve as a third party to the dispute.” This is a crucial and often misunderstood takeaway for condo owners. While an HOA’s role is to manage common elements and enforce community-wide rules, it is not legally obligated—and often not permitted—to intervene in private disputes between two homeowners over damage originating from private property. Your HOA is not a landlord or a mediator for personal conflicts; it’s an administrative body with a specific and legally defined scope of authority.

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Conclusion: Know Your Lines

The lessons from this case are clear: condo living involves a complex web of overlapping responsibilities. The line between what constitutes a common element, your private property, and your neighbor’s property is legally significant and determines who is ultimately responsible when things go wrong. Understanding these distinctions isn’t just helpful—it’s essential for protecting your investment and resolving issues effectively.

Before the next problem arises, have you read your community documents to know exactly where your responsibility ends and your neighbor’s begins?


Case Participants

Petitioner Side

  • Ronna Biesecker (petitioner)
    Appeared and testified on her own behalf.

Respondent Side

  • Robert Eric Struse (statutory agent)
    6100 Fifth Condominium Homeowners Association
    Appeared and presented testimony on behalf of Respondent.

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate

Douglas J Karolak vs. VVE – Casa Grande Homeowners Association

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Case Summary

Case ID 20F-H2020041-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-05-21
Administrative Law Judge Tammy L. Eigenheer
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Douglas J. Karolak Counsel —
Respondent VVE – Casa Grande Homeowners Association Counsel David Fitzgibbons

Alleged Violations

A.R.S. § 33-1817(A)(1); CC&Rs Part 10, Section 10.4

Outcome Summary

Petitioner was deemed the prevailing party after establishing that the Respondent HOA violated A.R.S. § 33-1817(A)(1) and the community documents by improperly recording Amended CC&Rs without proper owner consent. The Respondent was ordered to refund the $500.00 filing fee. However, the ALJ could not grant the requested relief (rescission of the Amended CC&Rs) due to a lack of statutory authority.

Key Issues & Findings

Violation regarding the validity of Amended CC&Rs due to lack of required owner approval.

The Petitioner alleged that the Amended CC&Rs recorded by the Board were invalid because they were not approved by two-thirds (2/3) of the lot owners as required by the CC&Rs and statute. The ALJ agreed, finding the Board acted improperly and violated the documents and statute.

Orders: Respondent was ordered to pay Petitioner the filing fee of $500.00. No civil penalty was assessed. The ALJ determined she lacked the statutory authority to order the rescission of the Amended CC&Rs requested by the Petitioner.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1817(A)(1)
  • CC&Rs Part 10, Section 10.4

Analytics Highlights

Topics: HOA Dispute, CC&R Amendment, Board Authority, Filing Fee Refund, Partial Win
Additional Citations:

  • 20F-H2020041-REL
  • A.R.S. § 33-1817
  • A.R.S. § 33-1817(A)(1)
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.07(G)(2)
  • CC&Rs Part 10, Section 10.4

Video Overview

Audio Overview

Decision Documents

20F-H2020041-REL Decision – 792824.pdf

Uploaded 2026-01-23T17:31:22 (102.9 KB)





Briefing Doc – 20F-H2020041-REL


Briefing Document: Karolak vs. VVE – Casa Grande Homeowners Association

Executive Summary

This briefing analyzes the Administrative Law Judge (ALJ) Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL). The central issue was whether the HOA Board had the authority to unilaterally amend and record changes to the community’s Covenants, Conditions, and Restrictions (CC&Rs) without the required homeowner vote.

The petitioner, Douglas J. Karolak, successfully argued that the HOA violated its own governing documents and Arizona state law by filing “Amended CC&Rs” on October 5, 2018, without securing the approval of two-thirds of the lot owners. The HOA contended its actions were a valid exercise of its authority to create “Association Rules.”

ALJ Tammy L. Eigenheer ruled decisively in favor of the petitioner. The decision established a clear legal distinction between the Board’s power to adopt rules and the separate, more stringent process required to formally amend the CC&Rs. The judge found the Board acted improperly, declaring Karolak the prevailing party and ordering the HOA to reimburse his $500 filing fee. Notably, while the judge found the amended document was improperly recorded, she concluded she lacked the statutory authority to order its rescission, which was the remedy the petitioner had requested.

Case Overview

Case Name

Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association

Case Number

20F-H2020041-REL

Arizona Office of Administrative Hearings

Administrative Law Judge

Tammy L. Eigenheer

Hearing Date

May 1, 2020

Decision Date

May 21, 2020

The Central Dispute

The core of the dispute revolved around the legitimacy of a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs), which the HOA Board recorded with the Pinal County Recorder on October 5, 2018.

• Petitioner’s Position (Douglas J. Karolak): The Amended CC&Rs are invalid because they were not approved by “owners of at least two-thirds (2/3) of the Lots,” a requirement explicitly stated in Section 10.4 of the original CC&Rs and supported by Arizona statute A.R.S. § 33-1817(A)(1). Karolak argued that the Board’s action of recording an amendment is fundamentally different from its power to adopt internal “Association Rules.”

• Respondent’s Position (VVE – Casa Grande HOA): The Board argued that its actions were a valid exercise of the authority granted to it under the CC&Rs. It claimed that because the only changes were to Part 7 (Use Restrictions), they fell under the Board’s power to “adopt, amend, or repeal such rules and regulations as it deems reasonable and appropriate” (Section 3.4) and to “modify or waive the foregoing restrictions… by reasonable rules and regulations” (Section 7.43). The Respondent’s counsel did, however, concede that “perhaps the Amended CC&Rs should not have been recorded.”

Factual Background and Chronology

• The VVE – Casa Grande Homeowners Association is a 56-lot community in Casa Grande, Arizona, with 19 lots remaining vacant at the time of the hearing.

• April 30, 1999: The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” (CC&Rs) was recorded.

• 2014 and 2015: The HOA Board made unsuccessful attempts to amend the CC&Rs through membership votes.

• 2018: Following the failed votes, the Board determined it would make changes to the “rules section” of the CC&Rs under the authority it believed was granted by Section 3.4.

• October 5, 2018: The Board recorded the Amended CC&Rs with the Pinal County Recorder. The HOA acknowledged that these amendments had not been approved by the required two-thirds of lot owners.

Legal Analysis and Key Provisions

The decision rested on the interpretation of specific sections of the community’s CC&Rs and Arizona state law. The judge concluded that the document’s structure clearly separates the process of rulemaking from the process of formal amendment.

Provision

Source

Summary of Stipulation

Amendment Process

CC&Rs Section 10.4

Requires an instrument “executed by the Owners of at least two-thirds (2/3) of the Lots” and recorded to become effective.

Rulemaking Authority

CC&Rs Section 3.4

Empowers the Board to adopt, amend, or repeal “Association Rules” governing the use of the property. States rules have the “same force and effect as if they were set forth in” the CC&Rs.

Statutory Requirement

A.R.S. § 33-1817(A)(1)

Provides that a declaration may be amended by the association via an affirmative vote or written consent of the number of owners specified in the declaration.

The judge’s rationale emphasized that the distinct sections for rulemaking (3.4) and amendments (10.4) demonstrate that the original drafters did not intend for the Board to have the power to unilaterally amend the CC&Rs. The judge stated, “The fact that the two topics are covered as separate topics in the CC&Rs leads to the conclusion that the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”

The Court’s Decision and Final Order

The Administrative Law Judge ruled that the petitioner, Douglas J. Karolak, had successfully proven by a preponderance of the evidence that the respondent HOA had acted improperly.

Key Findings:

• The HOA Board did not have the authority to amend the CC&Rs without the approval of two-thirds of the lot owners.

• The Board’s action of recording the Amended CC&Rs on October 5, 2018, was a violation of the community’s governing documents (Section 10.4) and Arizona state law (A.R.S. § 33-1817(A)(1)).

• The Board’s ability to create “Association Rules” is a separate and distinct process from the formal procedure required to amend the Declaration.

Final Order:

• The petitioner, Douglas J. Karolak, was deemed the prevailing party.

• The respondent HOA was ordered to pay the petitioner his $500.00 filing fee within thirty days of the order.

• No civil penalty was found to be appropriate in the matter.

• Critically, the judge determined that under the applicable statute (A.R.S. § 32-2199.02), the Administrative Law Judge does not have the authority to order the Amended CC&Rs rescinded, despite this being the remedy requested by the petitioner.

The order is binding on both parties unless a request for rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of the decision.






Study Guide – 20F-H2020041-REL


Study Guide: Karolak v. VVE – Casa Grande Homeowners Association

This guide is designed to review the key facts, legal arguments, and outcomes of the Administrative Law Judge Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL).

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the provided legal decision.

1. Who were the petitioner and the respondent in this case, and what was the petitioner’s core allegation?

2. What specific statute and section of the community documents did the petitioner claim the respondent violated?

3. According to Section 10.4 of the original CC&Rs, what was the required procedure for amending the Declaration?

4. Under what authority did the VVE – Casa Grande HOA Board claim it could make changes to the community documents without a membership vote?

5. What key event occurred on or about October 5, 2018, that became the central point of the dispute?

6. What was the respondent’s primary argument for why their actions were valid?

7. What is the “preponderance of the evidence,” and which party bears the burden of proof to establish a violation?

8. Why did the Administrative Law Judge conclude that the Board’s authority to create “Association Rules” was a separate process from amending the CC&Rs?

9. What remedy did the petitioner request, and why was it not granted by the Administrative Law Judge?

10. What was the final order issued by the Judge in this case?

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Answer Key

1. The petitioner was Douglas J. Karolak, a homeowner. The respondent was the VVE – Casa Grande Homeowners Association. Karolak’s core allegation was that the HOA had improperly amended the community’s governing documents.

2. The petitioner alleged a violation of Arizona Revised Statute (A.R.S.) § 33-1817(A)(1). He also claimed a violation of Part 10, Section 10.4 of the community’s Covenants, Conditions, and Restrictions (CC&Rs).

3. Section 10.4 of the CC&Rs stipulated that the Declaration could be amended by an instrument executed by the owners of at least two-thirds (2/3) of the lots. The amendment would not be effective until that instrument was officially recorded.

4. The HOA Board claimed it had the authority to make the changes under Section 3.4 of the CC&Rs. This section empowered the Board to adopt, amend, or repeal “Association Rules” as it deemed reasonable and appropriate.

5. On or about October 5, 2018, the Board recorded a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs) with the Pinal County Recorder. This was done without the required two-thirds vote from the lot owners.

6. The respondent argued that because the only changes made were to Part 7 (Use Restrictions), which fell under the type of rules the Board was authorized to adopt, the Amended CC&Rs were a valid exercise of the Board’s authority. Their counsel did acknowledge, however, that perhaps the document should not have been recorded.

7. A “preponderance of the evidence” is proof that convinces the trier of fact that a contention is more probably true than not. The petitioner bears the burden of proof to establish that the respondent committed the alleged violations by this standard.

8. The Judge concluded they were separate processes because the CC&Rs cover the topics in different sections. This separation led the Judge to believe the original drafters did not intend for the Board to have the authority to amend the CC&Rs on its own.

9. The petitioner requested that the improperly recorded Amended CC&Rs be rescinded. This remedy was not granted because the applicable statute, A.R.S. § 32-2199.02, does not give the Administrative Law Judge the specific authority to order a document rescinded.

10. The final order deemed the petitioner the prevailing party. It further ordered the respondent to repay the petitioner his $500.00 filing fee within thirty days, but found that no civil penalty was appropriate.

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Essay Questions

Instructions: The following questions are designed to promote deeper analysis of the case. Formulate a comprehensive response to each, using only the information presented in the legal decision.

1. Analyze the distinction made by the Administrative Law Judge between the Board’s authority to create “Association Rules” under Section 3.4 and the process for amending the Declaration under Section 10.4. Why was this distinction critical to the case’s outcome?

2. Discuss the legal standard of “preponderance of the evidence” as defined in the decision. How did the petitioner successfully meet this burden of proof to establish the respondent’s violation, and what specific facts supported this conclusion?

3. Examine the respondent’s (HOA’s) argument regarding its authority to amend the CC&Rs. What were the fundamental flaws in this argument, and how did their counsel’s acknowledgment about the recording of the Amended CC&Rs potentially weaken their position?

4. Explain the legal framework governing this dispute, citing the specific Arizona Revised Statutes (A.R.S.) mentioned in the decision. Detail the roles of the Arizona Department of Real Estate, the Office of Administrative Hearings, and the Administrative Law Judge in resolving this type of HOA conflict.

5. Evaluate the final Order of the Administrative Law Judge. While the petitioner was deemed the prevailing party, why was their requested remedy (rescission of the Amended CC&Rs) denied? What does this reveal about the specific limits of the Administrative Law Judge’s authority in such cases under A.R.S. § 32-2199.02?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings. In this case, Tammy L. Eigenheer of the Office of Administrative Hearings made the findings of fact, conclusions of law, and issued the final order.

A.R.S. § 33-1817(A)(1)

The specific Arizona Revised Statute cited by the petitioner. It states that a declaration may be amended by the association with an affirmative vote or written consent of the number of owners specified in the declaration.

Amended CC&Rs

The document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates,” which the HOA Board recorded on October 5, 2018, without the required two-thirds owner approval.

Association Rules

Rules and regulations that the HOA Board is empowered to adopt, amend, or repeal under Section 3.4 of the CC&Rs to govern the use of Common Areas and other parts of the Project. The Board argued their changes fell under this authority.

Burden of Proof

The obligation to prove one’s assertion. In this case, the petitioner bore the burden of proof to establish the respondent’s violations by a preponderance of the evidence.

An acronym for Covenants, Conditions, and Restrictions. These are the governing legal documents for a planned community. The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” was recorded on April 30, 1999.

Department

Refers to the Arizona Department of Real Estate, the agency with which the petitioner filed his Homeowners Association (HOA) Dispute Process Petition.

An acronym for Homeowners Association. In this case, the VVE – Casa Grande Homeowners Association, an association of 56 lot owners in Casa Grande, Arizona.

Office of Administrative Hearings

The office responsible for conducting hearings for disputes filed with state agencies like the Department of Real Estate.

Petitioner

The party who initiates a legal action or petition. In this case, homeowner Douglas J. Karolak.

Preponderance of the Evidence

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

Respondent

The party against whom a petition is filed. In this case, the VVE – Casa Grande Homeowners Association.






Blog Post – 20F-H2020041-REL


Your HOA Just Changed the Rules? Why This Homeowner’s $500 Victory is a Warning to Everyone

For millions of Americans, living in a planned community means living under the authority of a Homeowners Association (HOA). While intended to protect property values, these relationships can often feel one-sided, with boards issuing mandates and homeowners feeling powerless to push back. It’s a common frustration, but it’s rare to see a single homeowner challenge their board and force a legal reckoning.

A recent case from Arizona, Douglas J. Karolak versus the VVE – Casa Grande Homeowners Association, provides a critical case study in board overreach and the surprising limits of legal victory. Karolak alleged his HOA board violated its own governing documents and state law by improperly changing the community’s core rules.

He took his case to an administrative law judge and, in a significant ruling, he won. But the outcome of this seemingly straightforward dispute was far from simple. The final decision reveals a shocking twist that holds critical lessons for every homeowner about the difference between being right on paper and getting the remedy you actually want.

There’s a Huge Difference Between a ‘Rule Change’ and a ‘Declaration Amendment’

The first lesson from this case is a critical one for every homeowner: understand the constitutional hierarchy of your community’s documents. The core of the dispute was the HOA Board’s attempt to amend its foundational document, the CC&Rs (Covenants, Conditions, and Restrictions), without getting the required approval from the homeowners.

Here are the key facts of the case:

• The Original Rule: The community’s CC&Rs explicitly stated in Section 10.4 that any amendment required a vote and execution by “at least two-thirds (2/3) of the Lots.” This is the highest level of authority in a planned community, akin to a constitution.

• The Failed Attempts: The Board had tried to get this two-thirds vote in both 2014 and 2015, but was unsuccessful.

• The Workaround: In 2018, the Board decided to bypass the homeowners. It used a separate power granted in Section 3.4 of the CC&Rs—the authority to create day-to-day “Association Rules”—to make what it called changes to the “‘rules section’ of the CC&Rs, specifically targeting the Use Restrictions in Part 7.”

The judge’s conclusion was crystal clear: The CC&Rs were drafted to treat the power to create “rules” and the power to “amend” the declaration as two entirely separate processes. This separation acts as a crucial check on the board’s power, preventing a small group from unilaterally changing the fundamental property rights of all owners. As the judge noted, “the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”

Recording a Document Doesn’t Magically Make It Valid

To make their changes appear official, the HOA Board took a significant step. On October 5, 2018, they filed a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates (Amended CC&Rs)” with the Pinal County Recorder.

For the average homeowner, a formally recorded document filed with the county looks final, official, and legally binding. It’s an intimidating piece of paper that suggests any challenge would be futile.

However, the judge’s ruling highlights a critical legal truth: procedural legitimacy is paramount. An official-looking document, even one filed with the county, is invalid if the legal process required to create it was ignored. The judge found that because the Board did not follow the correct internal procedure—securing the two-thirds vote from homeowners—the very act of recording the document was improper. Even the HOA’s own lawyer seemed to concede this point during the hearing, acknowledging that “perhaps the Amended CC&Rs should not have been recorded.”

The Winner’s Paradox: You Can Be Right and Still Not Get Your Desired Fix

The final order from the Administrative Law Judge was unambiguous: Douglas Karolak, the petitioner, was officially deemed the “prevailing party.” The judge concluded that the HOA had acted in violation of its own community documents and Arizona state law. This was a clear-cut victory for the homeowner.

But here is the shocking twist. Karolak’s requested remedy was for the illegally filed “Amended CC&Rs” to be rescinded—in other words, to have them officially nullified and removed. This seems like the logical and necessary fix to the problem.

The judge, however, was bound by the limits of her authority. The final decision states plainly: “The Administrative Law Judge does not have the authority under the applicable statute to order the Amended CC&Rs rescinded.” This highlights a critical jurisdictional gap. The Administrative Law Judge’s role in this venue is to determine if a violation occurred and assign limited penalties, not to perform the function of a higher court, which might have the power to void a recorded document.

So, what was the actual remedy for this clear violation? The judge ordered the HOA to repay Karolak his $500 filing fee. No other civil penalty was issued. The homeowner won the argument but did not get the one thing he asked for to correct the board’s improper action.

A Victory on Paper, A Question in Practice

The case of Douglas J. Karolak is a powerful real-world lesson. It proves that a single homeowner, armed with a thorough understanding of their community’s governing documents, can successfully challenge an overreaching HOA board and win. It confirms that procedural shortcuts, even when filed and recorded, do not make an illegal action legal.

But it also reveals the frustrating limitations that can exist within the legal process. The homeowner was proven right, but the improperly filed document remains on the books, unable to be rescinded in this specific venue. It raises a crucial question for homeowners everywhere: How do you ensure your victory has real teeth?


Case Participants

Petitioner Side

  • Douglas J. Karolak (petitioner)

Respondent Side

  • David A. Fitzgibbons III (HOA attorney)
    Fitzgibbons Law Offices PLC
    Represented VVE – Casa Grande Homeowners Association
  • CV Mathai (witness)
    VVE – Casa Grande Homeowners Association
  • John Kelsey (witness)
    VVE – Casa Grande Homeowners Association
  • Kristi Kelsey (witness)
    VVE – Casa Grande Homeowners Association
  • William Findley (witness)
    VVE – Casa Grande Homeowners Association
  • Kay Niemi (witness)
    VVE – Casa Grande Homeowners Association
  • Mark Korte (witness)
    VVE – Casa Grande Homeowners Association
  • Felicia Del Sol (property manager rep)
    Norris Management

Neutral Parties

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

Douglas J Karolak vs. VVE – Casa Grande Homeowners Association

Posted on by

Case Summary

Case ID 20F-H2020041-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-05-21
Administrative Law Judge Tammy L. Eigenheer
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Douglas J. Karolak Counsel —
Respondent VVE – Casa Grande Homeowners Association Counsel David Fitzgibbons

Alleged Violations

A.R.S. § 33-1817(A)(1); CC&Rs Part 10, Section 10.4

Outcome Summary

Petitioner was deemed the prevailing party after establishing that the Respondent HOA violated A.R.S. § 33-1817(A)(1) and the community documents by improperly recording Amended CC&Rs without proper owner consent. The Respondent was ordered to refund the $500.00 filing fee. However, the ALJ could not grant the requested relief (rescission of the Amended CC&Rs) due to a lack of statutory authority.

Key Issues & Findings

Violation regarding the validity of Amended CC&Rs due to lack of required owner approval.

The Petitioner alleged that the Amended CC&Rs recorded by the Board were invalid because they were not approved by two-thirds (2/3) of the lot owners as required by the CC&Rs and statute. The ALJ agreed, finding the Board acted improperly and violated the documents and statute.

Orders: Respondent was ordered to pay Petitioner the filing fee of $500.00. No civil penalty was assessed. The ALJ determined she lacked the statutory authority to order the rescission of the Amended CC&Rs requested by the Petitioner.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1817(A)(1)
  • CC&Rs Part 10, Section 10.4

Analytics Highlights

Topics: HOA Dispute, CC&R Amendment, Board Authority, Filing Fee Refund, Partial Win
Additional Citations:

  • 20F-H2020041-REL
  • A.R.S. § 33-1817
  • A.R.S. § 33-1817(A)(1)
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.07(G)(2)
  • CC&Rs Part 10, Section 10.4

Video Overview

Audio Overview

Decision Documents

20F-H2020041-REL Decision – 792824.pdf

Uploaded 2025-10-09T03:34:49 (102.9 KB)





Briefing Doc – 20F-H2020041-REL


Briefing Document: Karolak vs. VVE – Casa Grande Homeowners Association

Executive Summary

This briefing analyzes the Administrative Law Judge (ALJ) Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL). The central issue was whether the HOA Board had the authority to unilaterally amend and record changes to the community’s Covenants, Conditions, and Restrictions (CC&Rs) without the required homeowner vote.

The petitioner, Douglas J. Karolak, successfully argued that the HOA violated its own governing documents and Arizona state law by filing “Amended CC&Rs” on October 5, 2018, without securing the approval of two-thirds of the lot owners. The HOA contended its actions were a valid exercise of its authority to create “Association Rules.”

ALJ Tammy L. Eigenheer ruled decisively in favor of the petitioner. The decision established a clear legal distinction between the Board’s power to adopt rules and the separate, more stringent process required to formally amend the CC&Rs. The judge found the Board acted improperly, declaring Karolak the prevailing party and ordering the HOA to reimburse his $500 filing fee. Notably, while the judge found the amended document was improperly recorded, she concluded she lacked the statutory authority to order its rescission, which was the remedy the petitioner had requested.

Case Overview

Case Name

Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association

Case Number

20F-H2020041-REL

Arizona Office of Administrative Hearings

Administrative Law Judge

Tammy L. Eigenheer

Hearing Date

May 1, 2020

Decision Date

May 21, 2020

The Central Dispute

The core of the dispute revolved around the legitimacy of a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs), which the HOA Board recorded with the Pinal County Recorder on October 5, 2018.

• Petitioner’s Position (Douglas J. Karolak): The Amended CC&Rs are invalid because they were not approved by “owners of at least two-thirds (2/3) of the Lots,” a requirement explicitly stated in Section 10.4 of the original CC&Rs and supported by Arizona statute A.R.S. § 33-1817(A)(1). Karolak argued that the Board’s action of recording an amendment is fundamentally different from its power to adopt internal “Association Rules.”

• Respondent’s Position (VVE – Casa Grande HOA): The Board argued that its actions were a valid exercise of the authority granted to it under the CC&Rs. It claimed that because the only changes were to Part 7 (Use Restrictions), they fell under the Board’s power to “adopt, amend, or repeal such rules and regulations as it deems reasonable and appropriate” (Section 3.4) and to “modify or waive the foregoing restrictions… by reasonable rules and regulations” (Section 7.43). The Respondent’s counsel did, however, concede that “perhaps the Amended CC&Rs should not have been recorded.”

Factual Background and Chronology

• The VVE – Casa Grande Homeowners Association is a 56-lot community in Casa Grande, Arizona, with 19 lots remaining vacant at the time of the hearing.

• April 30, 1999: The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” (CC&Rs) was recorded.

• 2014 and 2015: The HOA Board made unsuccessful attempts to amend the CC&Rs through membership votes.

• 2018: Following the failed votes, the Board determined it would make changes to the “rules section” of the CC&Rs under the authority it believed was granted by Section 3.4.

• October 5, 2018: The Board recorded the Amended CC&Rs with the Pinal County Recorder. The HOA acknowledged that these amendments had not been approved by the required two-thirds of lot owners.

Legal Analysis and Key Provisions

The decision rested on the interpretation of specific sections of the community’s CC&Rs and Arizona state law. The judge concluded that the document’s structure clearly separates the process of rulemaking from the process of formal amendment.

Provision

Source

Summary of Stipulation

Amendment Process

CC&Rs Section 10.4

Requires an instrument “executed by the Owners of at least two-thirds (2/3) of the Lots” and recorded to become effective.

Rulemaking Authority

CC&Rs Section 3.4

Empowers the Board to adopt, amend, or repeal “Association Rules” governing the use of the property. States rules have the “same force and effect as if they were set forth in” the CC&Rs.

Statutory Requirement

A.R.S. § 33-1817(A)(1)

Provides that a declaration may be amended by the association via an affirmative vote or written consent of the number of owners specified in the declaration.

The judge’s rationale emphasized that the distinct sections for rulemaking (3.4) and amendments (10.4) demonstrate that the original drafters did not intend for the Board to have the power to unilaterally amend the CC&Rs. The judge stated, “The fact that the two topics are covered as separate topics in the CC&Rs leads to the conclusion that the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”

The Court’s Decision and Final Order

The Administrative Law Judge ruled that the petitioner, Douglas J. Karolak, had successfully proven by a preponderance of the evidence that the respondent HOA had acted improperly.

Key Findings:

• The HOA Board did not have the authority to amend the CC&Rs without the approval of two-thirds of the lot owners.

• The Board’s action of recording the Amended CC&Rs on October 5, 2018, was a violation of the community’s governing documents (Section 10.4) and Arizona state law (A.R.S. § 33-1817(A)(1)).

• The Board’s ability to create “Association Rules” is a separate and distinct process from the formal procedure required to amend the Declaration.

Final Order:

• The petitioner, Douglas J. Karolak, was deemed the prevailing party.

• The respondent HOA was ordered to pay the petitioner his $500.00 filing fee within thirty days of the order.

• No civil penalty was found to be appropriate in the matter.

• Critically, the judge determined that under the applicable statute (A.R.S. § 32-2199.02), the Administrative Law Judge does not have the authority to order the Amended CC&Rs rescinded, despite this being the remedy requested by the petitioner.

The order is binding on both parties unless a request for rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of the decision.






Study Guide – 20F-H2020041-REL


Study Guide: Karolak v. VVE – Casa Grande Homeowners Association

This guide is designed to review the key facts, legal arguments, and outcomes of the Administrative Law Judge Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL).

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the provided legal decision.

1. Who were the petitioner and the respondent in this case, and what was the petitioner’s core allegation?

2. What specific statute and section of the community documents did the petitioner claim the respondent violated?

3. According to Section 10.4 of the original CC&Rs, what was the required procedure for amending the Declaration?

4. Under what authority did the VVE – Casa Grande HOA Board claim it could make changes to the community documents without a membership vote?

5. What key event occurred on or about October 5, 2018, that became the central point of the dispute?

6. What was the respondent’s primary argument for why their actions were valid?

7. What is the “preponderance of the evidence,” and which party bears the burden of proof to establish a violation?

8. Why did the Administrative Law Judge conclude that the Board’s authority to create “Association Rules” was a separate process from amending the CC&Rs?

9. What remedy did the petitioner request, and why was it not granted by the Administrative Law Judge?

10. What was the final order issued by the Judge in this case?

——————————————————————————–

Answer Key

1. The petitioner was Douglas J. Karolak, a homeowner. The respondent was the VVE – Casa Grande Homeowners Association. Karolak’s core allegation was that the HOA had improperly amended the community’s governing documents.

2. The petitioner alleged a violation of Arizona Revised Statute (A.R.S.) § 33-1817(A)(1). He also claimed a violation of Part 10, Section 10.4 of the community’s Covenants, Conditions, and Restrictions (CC&Rs).

3. Section 10.4 of the CC&Rs stipulated that the Declaration could be amended by an instrument executed by the owners of at least two-thirds (2/3) of the lots. The amendment would not be effective until that instrument was officially recorded.

4. The HOA Board claimed it had the authority to make the changes under Section 3.4 of the CC&Rs. This section empowered the Board to adopt, amend, or repeal “Association Rules” as it deemed reasonable and appropriate.

5. On or about October 5, 2018, the Board recorded a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs) with the Pinal County Recorder. This was done without the required two-thirds vote from the lot owners.

6. The respondent argued that because the only changes made were to Part 7 (Use Restrictions), which fell under the type of rules the Board was authorized to adopt, the Amended CC&Rs were a valid exercise of the Board’s authority. Their counsel did acknowledge, however, that perhaps the document should not have been recorded.

7. A “preponderance of the evidence” is proof that convinces the trier of fact that a contention is more probably true than not. The petitioner bears the burden of proof to establish that the respondent committed the alleged violations by this standard.

8. The Judge concluded they were separate processes because the CC&Rs cover the topics in different sections. This separation led the Judge to believe the original drafters did not intend for the Board to have the authority to amend the CC&Rs on its own.

9. The petitioner requested that the improperly recorded Amended CC&Rs be rescinded. This remedy was not granted because the applicable statute, A.R.S. § 32-2199.02, does not give the Administrative Law Judge the specific authority to order a document rescinded.

10. The final order deemed the petitioner the prevailing party. It further ordered the respondent to repay the petitioner his $500.00 filing fee within thirty days, but found that no civil penalty was appropriate.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed to promote deeper analysis of the case. Formulate a comprehensive response to each, using only the information presented in the legal decision.

1. Analyze the distinction made by the Administrative Law Judge between the Board’s authority to create “Association Rules” under Section 3.4 and the process for amending the Declaration under Section 10.4. Why was this distinction critical to the case’s outcome?

2. Discuss the legal standard of “preponderance of the evidence” as defined in the decision. How did the petitioner successfully meet this burden of proof to establish the respondent’s violation, and what specific facts supported this conclusion?

3. Examine the respondent’s (HOA’s) argument regarding its authority to amend the CC&Rs. What were the fundamental flaws in this argument, and how did their counsel’s acknowledgment about the recording of the Amended CC&Rs potentially weaken their position?

4. Explain the legal framework governing this dispute, citing the specific Arizona Revised Statutes (A.R.S.) mentioned in the decision. Detail the roles of the Arizona Department of Real Estate, the Office of Administrative Hearings, and the Administrative Law Judge in resolving this type of HOA conflict.

5. Evaluate the final Order of the Administrative Law Judge. While the petitioner was deemed the prevailing party, why was their requested remedy (rescission of the Amended CC&Rs) denied? What does this reveal about the specific limits of the Administrative Law Judge’s authority in such cases under A.R.S. § 32-2199.02?

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings. In this case, Tammy L. Eigenheer of the Office of Administrative Hearings made the findings of fact, conclusions of law, and issued the final order.

A.R.S. § 33-1817(A)(1)

The specific Arizona Revised Statute cited by the petitioner. It states that a declaration may be amended by the association with an affirmative vote or written consent of the number of owners specified in the declaration.

Amended CC&Rs

The document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates,” which the HOA Board recorded on October 5, 2018, without the required two-thirds owner approval.

Association Rules

Rules and regulations that the HOA Board is empowered to adopt, amend, or repeal under Section 3.4 of the CC&Rs to govern the use of Common Areas and other parts of the Project. The Board argued their changes fell under this authority.

Burden of Proof

The obligation to prove one’s assertion. In this case, the petitioner bore the burden of proof to establish the respondent’s violations by a preponderance of the evidence.

An acronym for Covenants, Conditions, and Restrictions. These are the governing legal documents for a planned community. The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” was recorded on April 30, 1999.

Department

Refers to the Arizona Department of Real Estate, the agency with which the petitioner filed his Homeowners Association (HOA) Dispute Process Petition.

An acronym for Homeowners Association. In this case, the VVE – Casa Grande Homeowners Association, an association of 56 lot owners in Casa Grande, Arizona.

Office of Administrative Hearings

The office responsible for conducting hearings for disputes filed with state agencies like the Department of Real Estate.

Petitioner

The party who initiates a legal action or petition. In this case, homeowner Douglas J. Karolak.

Preponderance of the Evidence

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

Respondent

The party against whom a petition is filed. In this case, the VVE – Casa Grande Homeowners Association.






Blog Post – 20F-H2020041-REL


Your HOA Just Changed the Rules? Why This Homeowner’s $500 Victory is a Warning to Everyone

For millions of Americans, living in a planned community means living under the authority of a Homeowners Association (HOA). While intended to protect property values, these relationships can often feel one-sided, with boards issuing mandates and homeowners feeling powerless to push back. It’s a common frustration, but it’s rare to see a single homeowner challenge their board and force a legal reckoning.

A recent case from Arizona, Douglas J. Karolak versus the VVE – Casa Grande Homeowners Association, provides a critical case study in board overreach and the surprising limits of legal victory. Karolak alleged his HOA board violated its own governing documents and state law by improperly changing the community’s core rules.

He took his case to an administrative law judge and, in a significant ruling, he won. But the outcome of this seemingly straightforward dispute was far from simple. The final decision reveals a shocking twist that holds critical lessons for every homeowner about the difference between being right on paper and getting the remedy you actually want.

There’s a Huge Difference Between a ‘Rule Change’ and a ‘Declaration Amendment’

The first lesson from this case is a critical one for every homeowner: understand the constitutional hierarchy of your community’s documents. The core of the dispute was the HOA Board’s attempt to amend its foundational document, the CC&Rs (Covenants, Conditions, and Restrictions), without getting the required approval from the homeowners.

Here are the key facts of the case:

• The Original Rule: The community’s CC&Rs explicitly stated in Section 10.4 that any amendment required a vote and execution by “at least two-thirds (2/3) of the Lots.” This is the highest level of authority in a planned community, akin to a constitution.

• The Failed Attempts: The Board had tried to get this two-thirds vote in both 2014 and 2015, but was unsuccessful.

• The Workaround: In 2018, the Board decided to bypass the homeowners. It used a separate power granted in Section 3.4 of the CC&Rs—the authority to create day-to-day “Association Rules”—to make what it called changes to the “‘rules section’ of the CC&Rs, specifically targeting the Use Restrictions in Part 7.”

The judge’s conclusion was crystal clear: The CC&Rs were drafted to treat the power to create “rules” and the power to “amend” the declaration as two entirely separate processes. This separation acts as a crucial check on the board’s power, preventing a small group from unilaterally changing the fundamental property rights of all owners. As the judge noted, “the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”

Recording a Document Doesn’t Magically Make It Valid

To make their changes appear official, the HOA Board took a significant step. On October 5, 2018, they filed a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates (Amended CC&Rs)” with the Pinal County Recorder.

For the average homeowner, a formally recorded document filed with the county looks final, official, and legally binding. It’s an intimidating piece of paper that suggests any challenge would be futile.

However, the judge’s ruling highlights a critical legal truth: procedural legitimacy is paramount. An official-looking document, even one filed with the county, is invalid if the legal process required to create it was ignored. The judge found that because the Board did not follow the correct internal procedure—securing the two-thirds vote from homeowners—the very act of recording the document was improper. Even the HOA’s own lawyer seemed to concede this point during the hearing, acknowledging that “perhaps the Amended CC&Rs should not have been recorded.”

The Winner’s Paradox: You Can Be Right and Still Not Get Your Desired Fix

The final order from the Administrative Law Judge was unambiguous: Douglas Karolak, the petitioner, was officially deemed the “prevailing party.” The judge concluded that the HOA had acted in violation of its own community documents and Arizona state law. This was a clear-cut victory for the homeowner.

But here is the shocking twist. Karolak’s requested remedy was for the illegally filed “Amended CC&Rs” to be rescinded—in other words, to have them officially nullified and removed. This seems like the logical and necessary fix to the problem.

The judge, however, was bound by the limits of her authority. The final decision states plainly: “The Administrative Law Judge does not have the authority under the applicable statute to order the Amended CC&Rs rescinded.” This highlights a critical jurisdictional gap. The Administrative Law Judge’s role in this venue is to determine if a violation occurred and assign limited penalties, not to perform the function of a higher court, which might have the power to void a recorded document.

So, what was the actual remedy for this clear violation? The judge ordered the HOA to repay Karolak his $500 filing fee. No other civil penalty was issued. The homeowner won the argument but did not get the one thing he asked for to correct the board’s improper action.

A Victory on Paper, A Question in Practice

The case of Douglas J. Karolak is a powerful real-world lesson. It proves that a single homeowner, armed with a thorough understanding of their community’s governing documents, can successfully challenge an overreaching HOA board and win. It confirms that procedural shortcuts, even when filed and recorded, do not make an illegal action legal.

But it also reveals the frustrating limitations that can exist within the legal process. The homeowner was proven right, but the improperly filed document remains on the books, unable to be rescinded in this specific venue. It raises a crucial question for homeowners everywhere: How do you ensure your victory has real teeth?


Case Participants

Petitioner Side

  • Douglas J. Karolak (petitioner)

Respondent Side

  • David A. Fitzgibbons III (HOA attorney)
    Fitzgibbons Law Offices PLC
    Represented VVE – Casa Grande Homeowners Association
  • CV Mathai (witness)
    VVE – Casa Grande Homeowners Association
  • John Kelsey (witness)
    VVE – Casa Grande Homeowners Association
  • Kristi Kelsey (witness)
    VVE – Casa Grande Homeowners Association
  • William Findley (witness)
    VVE – Casa Grande Homeowners Association
  • Kay Niemi (witness)
    VVE – Casa Grande Homeowners Association
  • Mark Korte (witness)
    VVE – Casa Grande Homeowners Association
  • Felicia Del Sol (property manager rep)
    Norris Management

Neutral Parties

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

Michael J Stoltenberg v. Rancho Del Oro Homeowners Association

Posted on by
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID 20F-H2019005-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2020-05-05
Administrative Law Judge Tammy L. Eigenheer
Outcome no
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Michael J. Stoltenberg Counsel —
Respondent Rancho Del Oro Homeowners Association Counsel Nicole Payne

Alleged Violations

Governing Documents

Outcome Summary

The Administrative Law Judge dismissed the petition because the controversy was not ripe. The Petitioner admitted that he had denied the HOA permission to enter his property to perform the maintenance he was suing them for not performing.

Why this result: The matter was not ripe for determination because the Petitioner had denied the Respondent access to the property.

Key Issues & Findings

Failure to provide landscaping maintenance

Petitioner alleged Respondent failed to maintain landscaping. Petitioner admitted he had notified Respondent it was not allowed to enter his property until January 2020.

Orders: Petition dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Decision Documents

20F-H2019005-REL-RHG Decision – 787446.pdf

Uploaded 2026-01-27T21:17:24 (77.6 KB)

20F-H2019005-REL-RHG Decision – ../20F-H2019005-REL/752939.pdf

Uploaded 2026-01-27T21:17:25 (58.3 KB)

**Case Summary: *Stoltenberg v. Rancho Del Oro Homeowners Association***
**Case No.** 20F-H2019005-REL-RHG
**Date of Rehearing Decision:** May 5, 2020

**Overview**
This summary details the proceedings of an administrative rehearing before the Arizona Department of Real Estate. The matter involves a dispute regarding landscaping maintenance obligations. It is crucial to distinguish between the original decision (dismissed for lack of ripeness) and the subsequent rehearing (which affirmed the dismissal).

**Procedural History: The Original Decision**
In the initial proceeding (Case No. 20F-H2019005-REL), Petitioner Michael J. Stoltenberg alleged that the Respondent, Rancho Del Oro Homeowners Association (HOA), failed to comply with a prior ruling requiring it to provide landscaping maintenance.

During the original hearing on October 30, 2019, the Petitioner admitted to the following facts:
* In 2013, he notified the HOA it was not allowed to enter his property.
* In April 2019, he notified the HOA that he expected maintenance to resume in January 2020.
* At the time of the 2019 hearing, the HOA still did not have permission to enter the property.

On November 14, 2019, Administrative Law Judge (ALJ) Tammy L. Eigenheer dismissed the petition. The ALJ ruled that because the HOA was barred from the property at the time of filing, the allegation that the HOA was violating governing documents was "not ripe for determination".

**The Rehearing: Case No. 20F-H2019005-REL-RHG**
The Petitioner requested a rehearing, arguing he was being "proactive" in seeking a resolution before the anticipated January 2020 violation. He further argued that by the time a rehearing occurred, the HOA would be in violation. The rehearing was granted and held on May 5, 2020.

**Key Arguments at Rehearing**
1. **Petitioner’s Admissions:** The Petitioner reiterated that he had denied the HOA access until January 2020.
2. **New Claims:** The Petitioner attempted to expand the scope of the dispute by arguing the HOA failed to maintain his *neighbors’* properties.
3. **Current Controversy:** The Petitioner argued that the HOA’s ongoing failure to maintain the landscaping *after* January 2020 created a present controversy.

**Legal Analysis and

Case Participants

Petitioner Side

  • Michael J. Stoltenberg (petitioner)
    Appeared on his own behalf

Respondent Side

  • Nicole Payne (Respondent Attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
    Represented Respondent at hearing
  • Lydia A. Peirce Linsmeier (Respondent Attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
    Listed on distribution list for the rehearing order

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Listed on distribution list

Richard P Quinn vs. Homestead North Homeowners Association

Posted on by

Case Summary

Case ID 20F-H2019040-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-05-05
Administrative Law Judge Tammy L. Eigenheer
Outcome no
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Richard P. Quinn Counsel —
Respondent Homestead North Homeowners Association Counsel Quinten T. Cupps

Alleged Violations

Bylaws Article III, Section III, Item 4

Outcome Summary

The ALJ dismissed the petition. The ruling clarified that while the Bylaws mention automatic resignation for delinquency, it is only effective upon Board acceptance. The Petitioner's attempt to accept the resignation via email did not constitute a valid Board action/vote.

Why this result: The Bylaws explicitly state resignation is effective when the Board accepts it. The Petitioner's email action was not a valid Board act under the Bylaws regarding meetings and quorums.

Key Issues & Findings

Failure to accept automatic resignation of delinquent director

Petitioner alleged that a Board member's delinquency constituted an automatic resignation under the Bylaws and that he, as a Board member, accepted it via email. The ALJ determined that the Bylaws require the Board to accept the resignation for it to be effective. The Petitioner's email did not constitute an act of the Board as it was not done at a duly held meeting with a quorum.

Orders: Petitioner's petition is dismissed.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • Bylaws Article III, Section 4
  • Bylaws Article III, Section 9

Decision Documents

20F-H2019040-REL Decision – 787679.pdf

Uploaded 2026-02-13T17:29:30 (108.8 KB)

**Case Summary: Richard P. Quinn vs. Homestead North Homeowners Association**
**Case No.:** 20F-H2019040-REL
**Date:** May 5, 2020

**Overview**
This Administrative Law Judge Decision concerns a Homeowners Association (HOA) Dispute Process Petition filed by Richard P. Quinn (Petitioner) against Homestead North Homeowners Association (Respondent). The dispute centered on whether a Board member, Karen Igo, had been automatically removed from her position due to alleged delinquent assessments. The case was decided via written briefs in lieu of an in-person hearing.

**Key Facts**
* **The Debt:** On March 13, 2019, a "Wall Charge" of $3,925.00 was posted to the account of Board member Karen Igo. Between April and October 2019, Ms. Igo made regular payments, paying the balance in full by October 21, 2019.
* **Petitioner's Actions:** Petitioner, also a Board member, contended that Ms. Igo’s debt triggered an automatic resignation under the Bylaws. On October 18, 2019, Petitioner sent an email to the Board stating he "accepted" Ms. Igo’s resignation. He argued that because no other Board members responded to the email, his solitary vote constituted a majority acceptance.
* **Bylaws Provisions:**
* *Article III, Section 4:* States that a director's delinquency constitutes a resignation which is "effective when the Board of Directors accepts such resignation".
* *Article III, Section 9:* Defines a valid act of the Board as a decision made by a majority of directors present at a "duly held meeting" where a quorum is present.

**Main Legal Issues**
The proceedings were bifurcated to address a specific legal question: **Did the Board accept the resignation?**. The Petitioner bore the burden of proving by a preponderance of the evidence that the Board had validly accepted Ms. Igo's resignation.

**Legal Analysis & Findings**
Administrative Law Judge Tammy L. Eigenheer ruled against the Petitioner based on the plain language of the Association's Bylaws:
1. **Effectiveness of Resignation:** The Judge affirmed that under Article III, Section 4, a resignation based on delinquency is not automatic; it requires Board acceptance to become effective.
2. **Invalidity of Email Action:** The Judge determined that Petitioner’s email did not constitute a "duly held meeting" of the Board. Consequently, an email correspondence could not establish a quorum, and the Petitioner’s "vote" could not be considered a majority decision or a valid act of the Board.
3. **Lack of Quorum:** The Petitioner failed to provide evidence that a quorum of the Board ever voted to accept Ms. Igo’s resignation at a proper meeting.

**Outcome**
The Judge found that Petitioner failed to prove the Board accepted the resignation. As the acceptance condition in the Bylaws was never met, the resignation was not effective. The petition was dismissed.

Case Participants

Petitioner Side

  • Richard P. Quinn (Petitioner)
    Homestead North Homeowners Association (Board Member)
    Appeared on his own behalf; member of the Board

Respondent Side

  • Quinten T. Cupps (Respondent Attorney)
    Represented Homestead North Homeowners Association
  • Karen Igo (Board member)
    Homestead North Homeowners Association
    Subject of the resignation dispute; had delinquent 'Wall Charge'

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Recipient of the order

Kenneth E Kassa v. Queen Creek Ranchettes Homeowners Association,

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Case Summary

Case ID 20F-H2019035-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-04-28
Administrative Law Judge Jenna Clark
Outcome no
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Kenneth E. Kassa Counsel —
Respondent Queen Creek Ranchettes Homeowners Association, Inc. Counsel —

Alleged Violations

A.R.S. § 33-1804

Outcome Summary

The ALJ denied the petition, finding that the HOA complied with requirements to hold annual meetings and the Petitioner did not sustain the burden of proof regarding alleged violations involving closed meetings.

Why this result: Burden of proof not met; Petitioner provided no evidence that specific private meetings violated A.R.S. § 33-1804.

Key Issues & Findings

Violation of Open Meeting Law

Petitioner alleged the Association violated open meeting laws by holding closed meetings that should have been public and failing to properly notice meetings.

Orders: The Administrative Law Judge ordered that the Petitioner's petition be denied.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1804

Decision Documents

20F-H2019035-REL Decision – 785528.pdf

Uploaded 2026-02-11T06:44:59 (146.6 KB)

**Case Summary: Kassa v. Queen Creek Ranchettes Homeowners Association, Inc.**

**Case Number:** 20F-H2019035-REL
**Forum:** Arizona Office of Administrative Hearings
**Presiding Judge:** Administrative Law Judge Jenna Clark
**Decision Date:** April 28, 2020

**Parties**
* **Petitioner:** Kenneth E. Kassa
* **Respondent:** Queen Creek Ranchettes Homeowners Association, Inc.

**Procedural Background**
On December 16, 2019, the Petitioner filed a petition with the Arizona Department of Real Estate alleging the Respondent violated state statutes governing homeowners' associations. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing, which took place on April 8, 2020.

**Key Facts**
* The Respondent is governed by CC&Rs and Bylaws, which constitute a contract between the Association and property owners.
* The Bylaws require the Association to hold an annual meeting of the Members.
* From 2017 through 2019, the Association held exactly one public annual meeting each year. All other meetings were conducted privately by the Board.
* The Association provided notice of meetings by posting flyers in common areas and made minutes available to Members upon written request.

**Main Legal Issue**
The primary issue was whether the Respondent violated **A.R.S. § 33-1804**, which governs open meetings for planned communities. This statute generally requires meetings of the association and board of directors to be open to all members, with specific statutory exceptions for closed sessions (e.g., legal advice, pending litigation, or personal information).

**Arguments**
* **Petitioner’s Position:** The Petitioner argued that the Association violated Open Meeting Law because many of the Board’s closed meetings should have been open to the public. He contended that the single annual meeting was unlawful because it served only to report on business already discussed behind closed doors throughout the year.
* **Respondent’s Position:** The Respondent denied the allegations, arguing that the Bylaws empowered the Board to hold one annual meeting, a requirement they strictly followed from 2017 to 2019.

**Findings and Conclusions of Law**
The Administrative Law Judge (ALJ) denied the petition based on the following findings:
1. **Burden of Proof:** The Petitioner bore the burden of proving the violation by a preponderance of the evidence.
2. **Lack of Evidence:** While the Petitioner believed the private meetings should have been public, he provided no evidence to show that the subject matter of those meetings failed to qualify for the statutory exceptions allowing for closed sessions.
3. **Undisputed Compliance:** It was undisputed that the Respondent held at least one public annual meeting as required.
4. **Scope of Review:** The ALJ noted that the Tribunal could not address the Petitioner's secondary arguments regarding the general appropriateness or lawfulness of the noticed private meetings, or lack thereof.

**Final Decision**
The ALJ concluded that the Petitioner failed to sustain the burden of proof. No violation of A.R.S. § 33-1804 was found, and the petition was **denied**.

Case Participants

Petitioner Side

  • Kenneth E. Kassa (petitioner)
    Queen Creek Ranchettes Phase I subdivision property owner
    Appeared on his own behalf

Respondent Side

  • Jody Augustin (board member)
    Queen Creek Ranchettes Homeowners Association, Inc.
    Represented the Association; called as a witness

Neutral Parties

  • Jenna Clark (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Recipient of the transmitted order

Other Participants

  • Dean McDaniels (observer)
    Listed under Appearances as observing
  • Kelly Kassa (observer)
    Listed under Appearances as observing
  • Kimberly Timm (observer)
    Listed under Appearances as observing
  • Sonya Foster (observer)
    Listed under Appearances as observing
  • Colleen Kaul (observer)
    Listed under Appearances as observing

Steven D. Stienstra v. Cedar Ridge Homeowners Association

Posted on by
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID 19F-H1918033-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2020-04-01
Administrative Law Judge Kay Abramsohn
Outcome total
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Steven D. Stienstra Counsel —
Respondent Cedar Ridge Homeowners Association Counsel Diana J. Elston, Keith D. Collett

Alleged Violations

A.R.S. § 33-1806.01; CC&Rs Section 1.1; CC&Rs Section 18

Outcome Summary

The petition was granted, finding that the HOA violated its own CC&Rs regarding enforcement procedures, particularly by failing to follow Section 18 requirements and by attempting to collect inappropriate legal fees under Section 1.1. The HOA was ordered to reimburse the Petitioner the $500.00 filing fee.

Why this result: The HOA failed to follow the mandatory enforcement procedure requirements set forth in CC&Rs Section 18 (written notice, 30 days to appear before the Board) and inappropriately applied CC&Rs Section 1.1 to pursue attorney fees against the owner rather than a lessee, rendering its subsequent enforcement actions unreasonable.

Key Issues & Findings

HOA enforcement action regarding CC&R violations and associated legal fees

Petitioner challenged the HOA's enforcement actions and resulting demands for legal fees related to short-term and partial-property rentals. The ALJ found the HOA proceeded inappropriately, did not follow the enforcement requirements set forth in CC&Rs Section 18, and improperly utilized Section 1.1 for actions against the owner, thus establishing a violation by the HOA.

Orders: HOA must reimburse Petitioner the $500.00 filing fee. Asserted legal fees sought by the HOA were determined not to be assignable to the Petitioner.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1806.01
  • CC&Rs Section 1.1
  • CC&Rs Section 18

Analytics Highlights

Topics: HOA Enforcement, Short-Term Rentals, CC&R Violation, Legal Fees, Due Process
Additional Citations:

  • A.R.S. § 33-1806.01
  • CC&Rs Section 1.1
  • CC&Rs Section 18
  • A.R.S. § 10-3830

Video Overview

Audio Overview

Decision Documents

19F-H1918033-REL-RHG Decision – 779896.pdf

Uploaded 2025-10-09T03:33:51 (210.6 KB)

19F-H1918033-REL-RHG Decision – ../19F-H1918033-REL/753362.pdf

Uploaded 2026-01-20T13:50:22 (169.0 KB)





Briefing Doc – 19F-H1918033-REL-RHG


Briefing Document: Stienstra v. Cedar Ridge Homeowners Association

Executive Summary

This document synthesizes two Administrative Law Judge (ALJ) decisions concerning a dispute between homeowner Steven D. Stienstra (Petitioner) and the Cedar Ridge Homeowners Association (HOA/Respondent). The core conflict centered on the HOA’s enforcement actions and subsequent demand for attorney’s fees related to alleged violations of Covenants, Conditions, and Restrictions (CC&Rs) prohibiting short-term rentals.

The ALJ ultimately ruled in favor of the Petitioner in both the initial hearing and a subsequent rehearing. The decisions established that the HOA violated its own CC&Rs by employing an incorrect and unreasonable enforcement procedure. Specifically, the HOA misapplied Section 1.1 of the CC&Rs, which governs an owner’s failure to take action against a non-compliant tenant, instead of following the prescribed due process for owner violations outlined in Section 18. Consequently, the ALJ concluded that the attorney’s fees demanded by the HOA were not assignable to the Petitioner. The final order required the HOA to reimburse the Petitioner’s $500 filing fee, affirming that the HOA’s actions, including a series of escalating cease and desist letters, were procedurally flawed and unreasonable given the circumstances.

Case Overview and Core Dispute

The case, No. 19F-H1918033-REL, involved a petition filed by Steven D. Stienstra in November 2018 with the Arizona Department of Real Estate. Mr. Stienstra alleged that the Cedar Ridge Homeowners Association, a voluntary board in Sedona, Arizona, violated A.R.S. § 33-1806.01 and Sections 1.1 and 18 of its own CC&Rs.

The dispute originated from short-term rental activity at Mr. Stienstra’s property, which he purchased in August 2017. While the Petitioner admitted to the initial violations, he contended that he ceased the activity immediately after a phone call from the HOA President in April 2018. Despite his assurances, the HOA, acting on legal advice, pursued enforcement through a series of cease and desist letters, culminating in a demand for $2,600 in attorney’s fees.

The central issue before the Office of Administrative Hearings was whether the HOA’s enforcement process was proper under its governing documents and, consequently, whether Mr. Stienstra was liable for the legal fees incurred by the HOA.

Chronology of the Dispute

Details

Aug 2017

Property Purchase

Steven D. Stienstra purchases the residence. He acknowledges the CC&R restrictions on short-term rentals.

Jan-Apr 2018

Rental Activity

Stienstra’s son uses VRBO to manage stays for friends and family, which expands to produce some revenue from rentals of less than 30 days.

Apr 3, 2018

Motor Home Incident

HOA Secretary Vic Burolla calls Stienstra about a motor home parked in the driveway, a separate CC&R violation.

April 2018

Ferguson’s Phone Call

HOA President Bill Ferguson calls Stienstra about the short-term rentals. Recollections vary, but Stienstra claims he agreed to cease the activity. Ferguson’s impression was that Stienstra was not going to stop.

Apr 26, 2018

HOA Retains Counsel

The first noted contact between the HOA and its law firm occurs after the phone call with Stienstra.

May 11, 2018

First Cease & Desist Letter

The HOA’s attorney sends a letter demanding Stienstra cease all rentals of less than 30 days and rentals of less than the entire property within ten days, threatening a lawsuit under Section 1.1 of the CC&Rs.

June 1, 2018

Second Cease & Desist Letter

The HOA rejects Stienstra’s explanation of compliance. The letter demands payment of $1,500.00 by July 2, 2018, described as a “flat amount to resolve the matter.”

June 17, 2018

Third Cease & Desist Letter

Citing a new Facebook Marketplace post by Stienstra’s son (offering to lease bedrooms separately), the HOA sends another letter. The demand for attorney’s fees increases to $2,600.00.

Sep 4, 2018

Informal Meeting

At Stienstra’s request, three HOA board members meet with him in an unofficial capacity to discuss the dispute. The meeting transcript reflects a tense relationship.

Nov 2018

Petition Filed

Stienstra files his petition with the Arizona Department of Real Estate.

Oct 7, 2019

Initial Hearing

The Office of Administrative Hearings conducts a hearing on the matter.

Nov 15, 2019

Initial Decision

ALJ Kay Abramsohn issues a decision finding the HOA violated its CC&Rs and grants Stienstra’s petition.

Dec 19, 2019

Rehearing Request

The HOA requests a rehearing, arguing the ALJ’s decision was “arbitrary, capricious, and an abuse of discretion.”

Mar 12, 2020

Rehearing

A rehearing is conducted where the HOA introduces new arguments, including that its board acted in good faith on legal advice.

Apr 1, 2020

Rehearing Decision

The ALJ issues a final decision affirming the original order, finding Stienstra to be the prevailing party and ordering the HOA to reimburse his $500 filing fee.

Analysis of Arguments and Evidence

Petitioner’s Position (Steven D. Stienstra)

• Compliance: Stienstra argued that he and his son ceased all short-term rental activity immediately following the April 2018 phone call from HOA President Bill Ferguson.

• Improper Procedure: The core of his argument was that the HOA failed to follow the enforcement procedures mandated by Section 18 of the CC&Rs. This section requires the Board to provide written notice of a breach, a 30-day period for the owner to appear before the Board, and a reasonable time (up to 60 days) to remedy the breach before levying fines.

• Misapplication of CC&Rs: Stienstra contended the HOA incorrectly proceeded under Section 1.1, which he argued applies to an owner’s failure to take legal action against a non-compliant tenant, not direct violations by the owner themselves.

• Unjustified Fees: Because the HOA did not provide due process and followed an improper enforcement path, Stienstra argued he should be released from any liability for the attorney’s fees the HOA incurred.

Respondent’s Position (Cedar Ridge HOA)

• Reasonable Belief of Violation: The HOA argued it had reason to believe violations were ongoing. It cited the continued presence of a VRBO listing (which Stienstra’s son claimed was inactive for booking) and observations of “multiple cars parked there daily” as evidence.

• Reliance on Legal Counsel: The HOA maintained that its actions were reasonable because it sought and followed the advice of its attorney. At the rehearing, it cited A.R.S. § 10-3830, arguing it discharged its duties in good faith.

• Discretion in Enforcement: The Board believed it had the discretion to enforce the CC&Rs under either Section 1.1 or Section 18. Board Secretary Vic Burolla testified at the rehearing that Section 1.1 was chosen because it “seemed more expeditious, to be able to collect” legal fees.

• “Unclean Hands” Doctrine: At the rehearing, the HOA argued for the first time that because Stienstra had admittedly violated the CC&Rs initially, he had “unclean hands” and was not entitled to seek relief regarding the HOA’s subsequent actions.

Key Evidence Presented

• CC&Rs: The text of Section 1.1 (“Leasing”) and Section 18 (“Enforcement of Covenants”) were central to the case.

• Cease & Desist Letters: The series of three letters from the HOA’s attorney documented the escalating demands and the HOA’s legal strategy.

• Testimony of Board Members: Testimony from Bill Ferguson and Vic Burolla provided insight into the Board’s decision-making process, including their impression of the April 2018 phone call and their justification for hiring an attorney. Vic Burolla provided conflicting testimony, stating in the initial hearing he was “not aware of any specific instructions in the CC&Rs” for notifications, but stating in the rehearing that the Board had discussed the benefits of proceeding under either Section 1.1 or Section 18.

• VRBO and Facebook Listings: Printouts of the online rental listings were used as evidence by the HOA to demonstrate ongoing or attempted violations.

• Meeting Transcript: A transcript of the informal September 4, 2018 meeting revealed the “tense relationship” and communication breakdown between the parties. When asked who was in the house if not tenants, Stienstra replied, “It’s not anybody’s business who’s in our house, really.”

Administrative Law Judge’s Findings and Rulings

The ALJ’s conclusions were consistent across both the initial decision and the rehearing decision, ultimately finding that the Petitioner had proven his case by a preponderance of the evidence.

Interpretation of Governing CC&Rs

• Section 1.1 vs. Section 18: The ALJ decisively concluded that the two sections govern different circumstances.

◦ Section 1.1 applies when an occupant or lessee violates the CC&Rs. It requires the owner to take legal action against that occupant within 10 days of a written demand from the Board. If the owner fails, the Board may act “on behalf of such owner against owner’s occupant.” The ALJ found these were “not the circumstances in this case.”

◦ Section 1.8 is the proper procedure for violations committed directly by the owner. It provides a clear due process framework: written notice, an opportunity to be heard by the Board, and a period to cure the breach.

• Conclusion: The ALJ ruled that the “appropriate action that was required to be taken by Respondent was set forth in Section 18 of the CC&Rs.” By using Section 1.1, the HOA committed a procedural violation.

Assessment of HOA Enforcement Actions

• Verbal Warning: The ALJ characterized the April 2018 phone call from Mr. Ferguson as “appropriate in the nature of education” but clarified it “is not an ‘enforcement’ action under the CC&Rs.”

• Unreasonable Continuation: The Judge found the HOA’s continued actions after the May 11 letter to be unreasonable. The decision notes that the HOA’s characterization of Stienstra “intentionally” continuing to violate the CC&Rs “simply demonstrates that the Board members did not and were not going to believe Petitioner or his son no matter what information they provided.”

• Distrust: The decision highlights the Board’s fundamental distrust, quoting Mr. Burolla’s testimony that even if the HOA had called to clarify the situation, “there’s no reason to suspect we would have been told the truth.”

Ruling on Attorney’s Fees

• Not Assignable to Petitioner: Because the HOA violated its own CC&Rs by following an improper enforcement procedure, the ALJ ruled that the “asserted legal fees are not assigned to Petitioner.”

• Improper Demand: The ALJ specifically analyzed the demand in the June 1, 2018 letter for “$1,500.00… authorized by the Board as a flat amount to resolve the matter.” The ruling states this amount “could only be looked at as either a settlement offer or as some sort of fine, which is not authorized under Section 1.1 but only under Section 18.” It was not a legitimate accounting of actual fees incurred as permitted by the CC&Rs.

• No Expenses Incurred Under Section 1.1: The Judge found that since Stienstra took action to stop the leasing, no legal action by the HOA “on behalf of the owner against the occupant” was required. Therefore, no expenses were actually incurred pursuant to the parameters of Section 1.1.

Final Decisions and Order

• Initial Decision (Nov 15, 2019): The petition was granted, and the HOA was ordered to reimburse Mr. Stienstra the $500.00 filing fee.

• Rehearing Decision (Apr 1, 2020): The ALJ affirmed the original order. The HOA’s new arguments regarding “good faith” and “unclean hands” did not alter the core finding of procedural failure. The final order declared the Petitioner the prevailing party and re-stated the requirement for the HOA to reimburse the filing fee.






Study Guide – 19F-H1918033-REL-RHG


Study Guide: Stienstra v. Cedar Ridge Homeowners Association

This study guide provides a comprehensive review of the administrative hearing and rehearing decisions in the case between petitioner Steven D. Stienstra and respondent Cedar Ridge Homeowners Association. It includes a short-answer quiz with an answer key, a series of essay questions for deeper analysis, and a glossary of key terms found in the legal decisions.

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing exclusively from the information provided in the case documents.

1. Who were the primary parties in this case, and what was the central issue that prompted the administrative hearing?

2. What specific violations of the CC&Rs did the homeowner, Steven Stienstra, or his son commit that initiated the dispute?

3. Describe the initial action taken by HOA President Bill Ferguson in April 2018 and explain why the Administrative Law Judge did not consider it a formal enforcement action.

4. The HOA’s attorneys sent three Cease & Desist letters. What was the primary demand of the first letter, and what financial demands were added in the second and third letters?

5. What were the two key sections of the CC&Rs at the center of the dispute, and what did each section generally govern?

6. Why did the Administrative Law Judge (ALJ) conclude that the HOA’s decision to proceed under Section 1.1 of the CC&Rs was inappropriate for the violations committed by the owner?

7. According to the ALJ’s decision, what specific procedural steps should the HOA have followed under Section 18 of the CC&Rs to properly enforce the covenants against an owner?

8. On what grounds did the Cedar Ridge HOA request a rehearing after the initial decision was issued in favor of the petitioner?

9. During the rehearing, the HOA introduced an “unclean hands” argument. What did this argument claim, and how did the ALJ respond to it?

10. What was the final, binding outcome of this case after the rehearing, including the ruling on attorney’s fees and the petitioner’s filing fee?

——————————————————————————–

Quiz Answer Key

1. The primary parties were the Petitioner, homeowner Steven D. Stienstra, and the Respondent, Cedar Ridge Homeowners Association (HOA). While the dispute began over rental violations, the central issue at the hearing was the liability for legal fees the HOA incurred and asserted were owed by the Petitioner.

2. The Petitioner’s son violated Section 1.1 of the CC&Rs by listing the property on VRBO for short-term rentals (less than 30 consecutive days) and producing revenue from January to April 2018. He also later posted on Facebook Marketplace offering to rent separate units within the home, which violated the rule requiring the lease of an “owner’s entire lot.”

3. HOA President Bill Ferguson made a phone call to Mr. Stienstra in April 2018 to bring the short-term rental violations to his attention. The ALJ characterized this as a “courtesy or informational call” and not a formal enforcement action because it did not comply with the written notice procedures required by either Section 1.1 or Section 18 of the CC&Rs.

4. The first letter (May 11, 2018) demanded that Stienstra cease all rentals of less than 30 days. The second letter (June 1, 2018) added a demand for $1,500 in attorney’s fees, and the third letter (June 17, 2018) increased this demand to $2,600.

5. The key sections were Section 1.1 and Section 18. Section 1.1 governed leasing requirements (e.g., minimum 30-day term) and detailed a process for an owner to take action against a non-compliant tenant (occupant). Section 18, titled “Enforcement of Covenants,” provided the formal process for the HOA Board to take action against a non-compliant owner.

6. The ALJ concluded that Section 1.1 was inappropriate because its enforcement mechanism empowers the HOA to act “on behalf of such owner against owner’s occupant” if the owner fails to do so. In this case, the HOA was taking direct action against the owner (Stienstra) for his own violations, a scenario that the ALJ determined was governed by Section 18.

7. Under Section 18, the HOA was required to notify the owner “in writing of the breach,” provide the owner 30 days to appear before the Board to respond, and then grant a reasonable time period (not to exceed 60 days) to remedy the breach before it could levy a fine.

8. The HOA requested a rehearing on the grounds that the ALJ’s decision was “arbitrary, capricious, and an abuse of discretion, and was not support by the evidence.” The HOA specifically alleged the ALJ had not considered evidence that it had reason to believe violations were continuing and had erred in interpreting the CC&Rs.

9. The HOA argued that because the Petitioner had admittedly violated the CC&Rs, he had “unclean hands” and therefore was not entitled to seek relief from the Department regarding the HOA’s actions. The ALJ noted that the remedy sought by the Petitioner was monetary (release from fees), not equitable, and the core issue remained whether the HOA’s enforcement actions were valid under its own governing documents.

10. The final outcome, upheld on rehearing, was that the Petitioner’s petition was granted. The HOA was ordered to reimburse Mr. Stienstra for his $500 filing fee, and the ALJ concluded that the asserted legal fees were not assignable to him due to the HOA’s failure to follow its own CC&R enforcement procedures.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response to each question using only the facts and arguments presented in the provided legal decisions.

1. Analyze the procedural missteps made by the Cedar Ridge HOA Board in its enforcement actions against Steven Stienstra. How did its choice to proceed under Section 1.1 instead of Section 18 fundamentally undermine its position, according to the Administrative Law Judge?

2. Discuss the role of communication and miscommunication in escalating the conflict between Stienstra and the HOA. Use specific examples from the text, such as the Ferguson phone call, the continued VRBO listing, the HOA’s internal distrust, and the unofficial board meeting, to illustrate your points.

3. Evaluate the HOA’s argument on rehearing that its actions were protected because they acted in good faith based on the advice of their attorney, as allowed under A.R.S. § 10-3830. Why was this argument ultimately unpersuasive to the Administrative Law Judge?

4. The central issue in this case evolved from CC&R violations to a dispute over attorney’s fees. Trace this evolution, explaining how each Cease & Desist letter escalated the financial stakes and why the ALJ ultimately determined the fees were not assignable to Stienstra.

5. Compare and contrast the enforcement mechanisms detailed in Section 1.1 and Section 18 of the Cedar Ridge CC&Rs. Explain the specific purpose of each section and why applying the correct one was critical to the outcome of this case.

——————————————————————————–

Glossary

Definition

A.R.S. § 33-1806.01

An Arizona Revised Statute providing that a planned community property owner may use their property as a rental unless prohibited in the declaration and must abide by the declaration’s rental time period restrictions.

Administrative Law Judge (ALJ)

The official who presides over administrative hearings, hears evidence, and makes legal findings and rulings. In this case, the ALJ was Kay Abramsohn.

Burden of Proof

The obligation on a party in a legal case to prove their allegations. In this proceeding, the Petitioner bore the burden of proving the HOA’s violations by a preponderance of the evidence.

Covenants, Conditions, and Restrictions. The governing legal documents that set forth the rules for a planned community or homeowners association.

Cease & Desist Letter

A formal written demand from an attorney or party to stop (cease) and not restart (desist) an allegedly illegal or infringing activity.

Declaration

The legal document that creates a homeowners association and its CC&Rs.

Forcible Entry and Detainer

A legal action, often used for eviction, to recover possession of real property from someone who is in wrongful possession. Section 1.1 mentions this as an action an owner could take against a non-compliant tenant.

A legal claim or right against a property to secure the payment of a debt. Section 18 of the CC&Rs allows the HOA to place a lien on a property for an unpaid special assessment or fine.

Occupant

As used in Section 1.1, refers to a tenant or lessee under a lease agreement, distinct from the property owner.

Petitioner

The party who files a petition initiating a legal or administrative action. In this case, homeowner Steven D. Stienstra.

Preponderance of the Evidence

The standard of proof in this case, meaning that the evidence as a whole shows that the fact sought to be proved is more probable than not.

Respondent

The party against whom a petition is filed. In this case, the Cedar Ridge Homeowners Association.

Special Assessment

A charge levied by an HOA against an owner for a specific purpose, such as repaying attorney’s fees incurred by the HOA or as a fine, as described in Sections 1.1 and 18.

Unclean Hands

A legal doctrine arguing that a party who has acted unethically or in bad faith in relation to the subject of a complaint should not be entitled to seek relief. The HOA raised this argument against the Petitioner on rehearing.

An Expedia Group website containing listings for vacation property rentals, which the Petitioner’s son used to list the property.






Blog Post – 19F-H1918033-REL-RHG


Study Guide: Stienstra v. Cedar Ridge Homeowners Association

This study guide provides a comprehensive review of the administrative hearing and rehearing decisions in the case between petitioner Steven D. Stienstra and respondent Cedar Ridge Homeowners Association. It includes a short-answer quiz with an answer key, a series of essay questions for deeper analysis, and a glossary of key terms found in the legal decisions.

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing exclusively from the information provided in the case documents.

1. Who were the primary parties in this case, and what was the central issue that prompted the administrative hearing?

2. What specific violations of the CC&Rs did the homeowner, Steven Stienstra, or his son commit that initiated the dispute?

3. Describe the initial action taken by HOA President Bill Ferguson in April 2018 and explain why the Administrative Law Judge did not consider it a formal enforcement action.

4. The HOA’s attorneys sent three Cease & Desist letters. What was the primary demand of the first letter, and what financial demands were added in the second and third letters?

5. What were the two key sections of the CC&Rs at the center of the dispute, and what did each section generally govern?

6. Why did the Administrative Law Judge (ALJ) conclude that the HOA’s decision to proceed under Section 1.1 of the CC&Rs was inappropriate for the violations committed by the owner?

7. According to the ALJ’s decision, what specific procedural steps should the HOA have followed under Section 18 of the CC&Rs to properly enforce the covenants against an owner?

8. On what grounds did the Cedar Ridge HOA request a rehearing after the initial decision was issued in favor of the petitioner?

9. During the rehearing, the HOA introduced an “unclean hands” argument. What did this argument claim, and how did the ALJ respond to it?

10. What was the final, binding outcome of this case after the rehearing, including the ruling on attorney’s fees and the petitioner’s filing fee?

——————————————————————————–

Quiz Answer Key

1. The primary parties were the Petitioner, homeowner Steven D. Stienstra, and the Respondent, Cedar Ridge Homeowners Association (HOA). While the dispute began over rental violations, the central issue at the hearing was the liability for legal fees the HOA incurred and asserted were owed by the Petitioner.

2. The Petitioner’s son violated Section 1.1 of the CC&Rs by listing the property on VRBO for short-term rentals (less than 30 consecutive days) and producing revenue from January to April 2018. He also later posted on Facebook Marketplace offering to rent separate units within the home, which violated the rule requiring the lease of an “owner’s entire lot.”

3. HOA President Bill Ferguson made a phone call to Mr. Stienstra in April 2018 to bring the short-term rental violations to his attention. The ALJ characterized this as a “courtesy or informational call” and not a formal enforcement action because it did not comply with the written notice procedures required by either Section 1.1 or Section 18 of the CC&Rs.

4. The first letter (May 11, 2018) demanded that Stienstra cease all rentals of less than 30 days. The second letter (June 1, 2018) added a demand for $1,500 in attorney’s fees, and the third letter (June 17, 2018) increased this demand to $2,600.

5. The key sections were Section 1.1 and Section 18. Section 1.1 governed leasing requirements (e.g., minimum 30-day term) and detailed a process for an owner to take action against a non-compliant tenant (occupant). Section 18, titled “Enforcement of Covenants,” provided the formal process for the HOA Board to take action against a non-compliant owner.

6. The ALJ concluded that Section 1.1 was inappropriate because its enforcement mechanism empowers the HOA to act “on behalf of such owner against owner’s occupant” if the owner fails to do so. In this case, the HOA was taking direct action against the owner (Stienstra) for his own violations, a scenario that the ALJ determined was governed by Section 18.

7. Under Section 18, the HOA was required to notify the owner “in writing of the breach,” provide the owner 30 days to appear before the Board to respond, and then grant a reasonable time period (not to exceed 60 days) to remedy the breach before it could levy a fine.

8. The HOA requested a rehearing on the grounds that the ALJ’s decision was “arbitrary, capricious, and an abuse of discretion, and was not support by the evidence.” The HOA specifically alleged the ALJ had not considered evidence that it had reason to believe violations were continuing and had erred in interpreting the CC&Rs.

9. The HOA argued that because the Petitioner had admittedly violated the CC&Rs, he had “unclean hands” and therefore was not entitled to seek relief from the Department regarding the HOA’s actions. The ALJ noted that the remedy sought by the Petitioner was monetary (release from fees), not equitable, and the core issue remained whether the HOA’s enforcement actions were valid under its own governing documents.

10. The final outcome, upheld on rehearing, was that the Petitioner’s petition was granted. The HOA was ordered to reimburse Mr. Stienstra for his $500 filing fee, and the ALJ concluded that the asserted legal fees were not assignable to him due to the HOA’s failure to follow its own CC&R enforcement procedures.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response to each question using only the facts and arguments presented in the provided legal decisions.

1. Analyze the procedural missteps made by the Cedar Ridge HOA Board in its enforcement actions against Steven Stienstra. How did its choice to proceed under Section 1.1 instead of Section 18 fundamentally undermine its position, according to the Administrative Law Judge?

2. Discuss the role of communication and miscommunication in escalating the conflict between Stienstra and the HOA. Use specific examples from the text, such as the Ferguson phone call, the continued VRBO listing, the HOA’s internal distrust, and the unofficial board meeting, to illustrate your points.

3. Evaluate the HOA’s argument on rehearing that its actions were protected because they acted in good faith based on the advice of their attorney, as allowed under A.R.S. § 10-3830. Why was this argument ultimately unpersuasive to the Administrative Law Judge?

4. The central issue in this case evolved from CC&R violations to a dispute over attorney’s fees. Trace this evolution, explaining how each Cease & Desist letter escalated the financial stakes and why the ALJ ultimately determined the fees were not assignable to Stienstra.

5. Compare and contrast the enforcement mechanisms detailed in Section 1.1 and Section 18 of the Cedar Ridge CC&Rs. Explain the specific purpose of each section and why applying the correct one was critical to the outcome of this case.

——————————————————————————–

Glossary

Definition

A.R.S. § 33-1806.01

An Arizona Revised Statute providing that a planned community property owner may use their property as a rental unless prohibited in the declaration and must abide by the declaration’s rental time period restrictions.

Administrative Law Judge (ALJ)

The official who presides over administrative hearings, hears evidence, and makes legal findings and rulings. In this case, the ALJ was Kay Abramsohn.

Burden of Proof

The obligation on a party in a legal case to prove their allegations. In this proceeding, the Petitioner bore the burden of proving the HOA’s violations by a preponderance of the evidence.

Covenants, Conditions, and Restrictions. The governing legal documents that set forth the rules for a planned community or homeowners association.

Cease & Desist Letter

A formal written demand from an attorney or party to stop (cease) and not restart (desist) an allegedly illegal or infringing activity.

Declaration

The legal document that creates a homeowners association and its CC&Rs.

Forcible Entry and Detainer

A legal action, often used for eviction, to recover possession of real property from someone who is in wrongful possession. Section 1.1 mentions this as an action an owner could take against a non-compliant tenant.

A legal claim or right against a property to secure the payment of a debt. Section 18 of the CC&Rs allows the HOA to place a lien on a property for an unpaid special assessment or fine.

Occupant

As used in Section 1.1, refers to a tenant or lessee under a lease agreement, distinct from the property owner.

Petitioner

The party who files a petition initiating a legal or administrative action. In this case, homeowner Steven D. Stienstra.

Preponderance of the Evidence

The standard of proof in this case, meaning that the evidence as a whole shows that the fact sought to be proved is more probable than not.

Respondent

The party against whom a petition is filed. In this case, the Cedar Ridge Homeowners Association.

Special Assessment

A charge levied by an HOA against an owner for a specific purpose, such as repaying attorney’s fees incurred by the HOA or as a fine, as described in Sections 1.1 and 18.

Unclean Hands

A legal doctrine arguing that a party who has acted unethically or in bad faith in relation to the subject of a complaint should not be entitled to seek relief. The HOA raised this argument against the Petitioner on rehearing.

An Expedia Group website containing listings for vacation property rentals, which the Petitioner’s son used to list the property.


Case Participants

Petitioner Side

  • Steven D. Stienstra (petitioner)
    Appeared on his own behalf,.
  • Petitioner's son (witness)
    Related to Petitioner
    Managed rental property listings (referred to as 'Son'),,; testified at hearing,.

Respondent Side

  • Michelle Molinario (HOA attorney)
    Jones, Skelton & Hochuli, PLC.
    Represented Cedar Ridge Homeowners Association,.
  • Keith D. Collett (HOA attorney)
    Jones, Skelton & Hochuli, PLC.
    Represented Cedar Ridge Homeowners Association/HOA,,.
  • Diana J. Elston (HOA attorney)
    Jones, Skelton & Hochuli, P.L.C.
    Represented Cedar Ridge Homeowners Association/HOA,.
  • Vic Burolla (board member)
    Cedar Ridge Homeowners Association
    HOA Board Secretary,,; witness at initial hearing,,; no longer Secretary by time of hearing,.
  • Bill Ferguson (board member)
    Cedar Ridge Homeowners Association
    HOA Board President,; no longer President by time of hearing,; witness at initial hearing.
  • Tucker (board member)
    Cedar Ridge Homeowners Association
    HOA Board Vice-president,; participated in September 4, 2018 meeting,.
  • Griffin (board member)
    Cedar Ridge Homeowners Association
    HOA Board Treasurer,; participated in September 4, 2018 meeting,.
  • Dick Ellis (board member)
    Cedar Ridge Homeowners Association
    May have attended portion of September 4, 2018 meeting,.

Neutral Parties

  • Kay Abramsohn (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge,,.
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
    Commissioner,,.

Steven D. Stienstra v. Cedar Ridge Homeowners Association

Posted on by
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID 19F-H1918033-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2020-04-01
Administrative Law Judge Kay Abramsohn
Outcome total
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Steven D. Stienstra Counsel —
Respondent Cedar Ridge Homeowners Association Counsel Michelle Molinario, Diana J. Elston, Keith D. Collett

Alleged Violations

A.R.S. § 33-1806.01; CC&Rs Section 1.1; CC&Rs Section 18

Outcome Summary

The Petitioner was the prevailing party. The ALJ affirmed that the HOA violated its CC&Rs regarding enforcement procedures, particularly by failing to adhere to Section 18 requirements and incorrectly applying Section 1.1 against the owner, rendering the legal fee demands improper. The HOA was ordered to reimburse the Petitioner the $500.00 filing fee,.

Why this result: The HOA failed to follow the explicit due process requirements (written notice and 30 days to appear) mandated by CC&Rs Section 18 for enforcement against the owner, and incorrectly relied on Section 1.1 to justify its demand for unauthorized flat fees,,,,.

Key Issues & Findings

HOA enforcement action regarding CC&R violations and asserted legal fees

Petitioner challenged the HOA's enforcement actions regarding short-term rentals and leasing less than the entire lot. The ALJ found the HOA proceeded inappropriately under Section 1.1 (intended for action against occupants on the owner's behalf) and failed to follow the mandatory enforcement requirements of Section 18, thus violating its own CC&Rs. Consequently, the asserted legal fees were not assigned to Petitioner,,,.

Orders: The Petition was granted. The HOA was ordered to reimburse the Petitioner the $500.00 filing fee,. The asserted legal fees of $1,500 and $2,600 sought by the HOA were determined not to be assignable to the Petitioner,.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1806.01
  • CC&Rs Section 1.1
  • CC&Rs Section 18

Analytics Highlights

Topics: HOA Enforcement, CC&R Violation, Legal Fees, Due Process, Rental Restriction
Additional Citations:

  • A.R.S. § 33-1806.01
  • CC&Rs Section 1.1
  • CC&Rs Section 18
  • A.R.S. § 10-3830

Video Overview

Audio Overview

Decision Documents

19F-H1918033-REL-RHG Decision – 779896.pdf

Uploaded 2026-01-23T17:27:52 (210.6 KB)

19F-H1918033-REL-RHG Decision – ../19F-H1918033-REL/753362.pdf

Uploaded 2026-01-23T17:27:56 (169.0 KB)





Briefing Doc – 19F-H1918033-REL-RHG


Briefing Document: Stienstra v. Cedar Ridge Homeowners Association

Executive Summary

This document synthesizes two Administrative Law Judge (ALJ) decisions concerning a dispute between homeowner Steven D. Stienstra (Petitioner) and the Cedar Ridge Homeowners Association (HOA/Respondent). The core conflict centered on the HOA’s enforcement actions and subsequent demand for attorney’s fees related to alleged violations of Covenants, Conditions, and Restrictions (CC&Rs) prohibiting short-term rentals.

The ALJ ultimately ruled in favor of the Petitioner in both the initial hearing and a subsequent rehearing. The decisions established that the HOA violated its own CC&Rs by employing an incorrect and unreasonable enforcement procedure. Specifically, the HOA misapplied Section 1.1 of the CC&Rs, which governs an owner’s failure to take action against a non-compliant tenant, instead of following the prescribed due process for owner violations outlined in Section 18. Consequently, the ALJ concluded that the attorney’s fees demanded by the HOA were not assignable to the Petitioner. The final order required the HOA to reimburse the Petitioner’s $500 filing fee, affirming that the HOA’s actions, including a series of escalating cease and desist letters, were procedurally flawed and unreasonable given the circumstances.

Case Overview and Core Dispute

The case, No. 19F-H1918033-REL, involved a petition filed by Steven D. Stienstra in November 2018 with the Arizona Department of Real Estate. Mr. Stienstra alleged that the Cedar Ridge Homeowners Association, a voluntary board in Sedona, Arizona, violated A.R.S. § 33-1806.01 and Sections 1.1 and 18 of its own CC&Rs.

The dispute originated from short-term rental activity at Mr. Stienstra’s property, which he purchased in August 2017. While the Petitioner admitted to the initial violations, he contended that he ceased the activity immediately after a phone call from the HOA President in April 2018. Despite his assurances, the HOA, acting on legal advice, pursued enforcement through a series of cease and desist letters, culminating in a demand for $2,600 in attorney’s fees.

The central issue before the Office of Administrative Hearings was whether the HOA’s enforcement process was proper under its governing documents and, consequently, whether Mr. Stienstra was liable for the legal fees incurred by the HOA.

Chronology of the Dispute

Details

Aug 2017

Property Purchase

Steven D. Stienstra purchases the residence. He acknowledges the CC&R restrictions on short-term rentals.

Jan-Apr 2018

Rental Activity

Stienstra’s son uses VRBO to manage stays for friends and family, which expands to produce some revenue from rentals of less than 30 days.

Apr 3, 2018

Motor Home Incident

HOA Secretary Vic Burolla calls Stienstra about a motor home parked in the driveway, a separate CC&R violation.

April 2018

Ferguson’s Phone Call

HOA President Bill Ferguson calls Stienstra about the short-term rentals. Recollections vary, but Stienstra claims he agreed to cease the activity. Ferguson’s impression was that Stienstra was not going to stop.

Apr 26, 2018

HOA Retains Counsel

The first noted contact between the HOA and its law firm occurs after the phone call with Stienstra.

May 11, 2018

First Cease & Desist Letter

The HOA’s attorney sends a letter demanding Stienstra cease all rentals of less than 30 days and rentals of less than the entire property within ten days, threatening a lawsuit under Section 1.1 of the CC&Rs.

June 1, 2018

Second Cease & Desist Letter

The HOA rejects Stienstra’s explanation of compliance. The letter demands payment of $1,500.00 by July 2, 2018, described as a “flat amount to resolve the matter.”

June 17, 2018

Third Cease & Desist Letter

Citing a new Facebook Marketplace post by Stienstra’s son (offering to lease bedrooms separately), the HOA sends another letter. The demand for attorney’s fees increases to $2,600.00.

Sep 4, 2018

Informal Meeting

At Stienstra’s request, three HOA board members meet with him in an unofficial capacity to discuss the dispute. The meeting transcript reflects a tense relationship.

Nov 2018

Petition Filed

Stienstra files his petition with the Arizona Department of Real Estate.

Oct 7, 2019

Initial Hearing

The Office of Administrative Hearings conducts a hearing on the matter.

Nov 15, 2019

Initial Decision

ALJ Kay Abramsohn issues a decision finding the HOA violated its CC&Rs and grants Stienstra’s petition.

Dec 19, 2019

Rehearing Request

The HOA requests a rehearing, arguing the ALJ’s decision was “arbitrary, capricious, and an abuse of discretion.”

Mar 12, 2020

Rehearing

A rehearing is conducted where the HOA introduces new arguments, including that its board acted in good faith on legal advice.

Apr 1, 2020

Rehearing Decision

The ALJ issues a final decision affirming the original order, finding Stienstra to be the prevailing party and ordering the HOA to reimburse his $500 filing fee.

Analysis of Arguments and Evidence

Petitioner’s Position (Steven D. Stienstra)

• Compliance: Stienstra argued that he and his son ceased all short-term rental activity immediately following the April 2018 phone call from HOA President Bill Ferguson.

• Improper Procedure: The core of his argument was that the HOA failed to follow the enforcement procedures mandated by Section 18 of the CC&Rs. This section requires the Board to provide written notice of a breach, a 30-day period for the owner to appear before the Board, and a reasonable time (up to 60 days) to remedy the breach before levying fines.

• Misapplication of CC&Rs: Stienstra contended the HOA incorrectly proceeded under Section 1.1, which he argued applies to an owner’s failure to take legal action against a non-compliant tenant, not direct violations by the owner themselves.

• Unjustified Fees: Because the HOA did not provide due process and followed an improper enforcement path, Stienstra argued he should be released from any liability for the attorney’s fees the HOA incurred.

Respondent’s Position (Cedar Ridge HOA)

• Reasonable Belief of Violation: The HOA argued it had reason to believe violations were ongoing. It cited the continued presence of a VRBO listing (which Stienstra’s son claimed was inactive for booking) and observations of “multiple cars parked there daily” as evidence.

• Reliance on Legal Counsel: The HOA maintained that its actions were reasonable because it sought and followed the advice of its attorney. At the rehearing, it cited A.R.S. § 10-3830, arguing it discharged its duties in good faith.

• Discretion in Enforcement: The Board believed it had the discretion to enforce the CC&Rs under either Section 1.1 or Section 18. Board Secretary Vic Burolla testified at the rehearing that Section 1.1 was chosen because it “seemed more expeditious, to be able to collect” legal fees.

• “Unclean Hands” Doctrine: At the rehearing, the HOA argued for the first time that because Stienstra had admittedly violated the CC&Rs initially, he had “unclean hands” and was not entitled to seek relief regarding the HOA’s subsequent actions.

Key Evidence Presented

• CC&Rs: The text of Section 1.1 (“Leasing”) and Section 18 (“Enforcement of Covenants”) were central to the case.

• Cease & Desist Letters: The series of three letters from the HOA’s attorney documented the escalating demands and the HOA’s legal strategy.

• Testimony of Board Members: Testimony from Bill Ferguson and Vic Burolla provided insight into the Board’s decision-making process, including their impression of the April 2018 phone call and their justification for hiring an attorney. Vic Burolla provided conflicting testimony, stating in the initial hearing he was “not aware of any specific instructions in the CC&Rs” for notifications, but stating in the rehearing that the Board had discussed the benefits of proceeding under either Section 1.1 or Section 18.

• VRBO and Facebook Listings: Printouts of the online rental listings were used as evidence by the HOA to demonstrate ongoing or attempted violations.

• Meeting Transcript: A transcript of the informal September 4, 2018 meeting revealed the “tense relationship” and communication breakdown between the parties. When asked who was in the house if not tenants, Stienstra replied, “It’s not anybody’s business who’s in our house, really.”

Administrative Law Judge’s Findings and Rulings

The ALJ’s conclusions were consistent across both the initial decision and the rehearing decision, ultimately finding that the Petitioner had proven his case by a preponderance of the evidence.

Interpretation of Governing CC&Rs

• Section 1.1 vs. Section 18: The ALJ decisively concluded that the two sections govern different circumstances.

◦ Section 1.1 applies when an occupant or lessee violates the CC&Rs. It requires the owner to take legal action against that occupant within 10 days of a written demand from the Board. If the owner fails, the Board may act “on behalf of such owner against owner’s occupant.” The ALJ found these were “not the circumstances in this case.”

◦ Section 1.8 is the proper procedure for violations committed directly by the owner. It provides a clear due process framework: written notice, an opportunity to be heard by the Board, and a period to cure the breach.

• Conclusion: The ALJ ruled that the “appropriate action that was required to be taken by Respondent was set forth in Section 18 of the CC&Rs.” By using Section 1.1, the HOA committed a procedural violation.

Assessment of HOA Enforcement Actions

• Verbal Warning: The ALJ characterized the April 2018 phone call from Mr. Ferguson as “appropriate in the nature of education” but clarified it “is not an ‘enforcement’ action under the CC&Rs.”

• Unreasonable Continuation: The Judge found the HOA’s continued actions after the May 11 letter to be unreasonable. The decision notes that the HOA’s characterization of Stienstra “intentionally” continuing to violate the CC&Rs “simply demonstrates that the Board members did not and were not going to believe Petitioner or his son no matter what information they provided.”

• Distrust: The decision highlights the Board’s fundamental distrust, quoting Mr. Burolla’s testimony that even if the HOA had called to clarify the situation, “there’s no reason to suspect we would have been told the truth.”

Ruling on Attorney’s Fees

• Not Assignable to Petitioner: Because the HOA violated its own CC&Rs by following an improper enforcement procedure, the ALJ ruled that the “asserted legal fees are not assigned to Petitioner.”

• Improper Demand: The ALJ specifically analyzed the demand in the June 1, 2018 letter for “$1,500.00… authorized by the Board as a flat amount to resolve the matter.” The ruling states this amount “could only be looked at as either a settlement offer or as some sort of fine, which is not authorized under Section 1.1 but only under Section 18.” It was not a legitimate accounting of actual fees incurred as permitted by the CC&Rs.

• No Expenses Incurred Under Section 1.1: The Judge found that since Stienstra took action to stop the leasing, no legal action by the HOA “on behalf of the owner against the occupant” was required. Therefore, no expenses were actually incurred pursuant to the parameters of Section 1.1.

Final Decisions and Order

• Initial Decision (Nov 15, 2019): The petition was granted, and the HOA was ordered to reimburse Mr. Stienstra the $500.00 filing fee.

• Rehearing Decision (Apr 1, 2020): The ALJ affirmed the original order. The HOA’s new arguments regarding “good faith” and “unclean hands” did not alter the core finding of procedural failure. The final order declared the Petitioner the prevailing party and re-stated the requirement for the HOA to reimburse the filing fee.






Study Guide – 19F-H1918033-REL-RHG


Study Guide: Stienstra v. Cedar Ridge Homeowners Association

This study guide provides a comprehensive review of the administrative hearing and rehearing decisions in the case between petitioner Steven D. Stienstra and respondent Cedar Ridge Homeowners Association. It includes a short-answer quiz with an answer key, a series of essay questions for deeper analysis, and a glossary of key terms found in the legal decisions.

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing exclusively from the information provided in the case documents.

1. Who were the primary parties in this case, and what was the central issue that prompted the administrative hearing?

2. What specific violations of the CC&Rs did the homeowner, Steven Stienstra, or his son commit that initiated the dispute?

3. Describe the initial action taken by HOA President Bill Ferguson in April 2018 and explain why the Administrative Law Judge did not consider it a formal enforcement action.

4. The HOA’s attorneys sent three Cease & Desist letters. What was the primary demand of the first letter, and what financial demands were added in the second and third letters?

5. What were the two key sections of the CC&Rs at the center of the dispute, and what did each section generally govern?

6. Why did the Administrative Law Judge (ALJ) conclude that the HOA’s decision to proceed under Section 1.1 of the CC&Rs was inappropriate for the violations committed by the owner?

7. According to the ALJ’s decision, what specific procedural steps should the HOA have followed under Section 18 of the CC&Rs to properly enforce the covenants against an owner?

8. On what grounds did the Cedar Ridge HOA request a rehearing after the initial decision was issued in favor of the petitioner?

9. During the rehearing, the HOA introduced an “unclean hands” argument. What did this argument claim, and how did the ALJ respond to it?

10. What was the final, binding outcome of this case after the rehearing, including the ruling on attorney’s fees and the petitioner’s filing fee?

——————————————————————————–

Quiz Answer Key

1. The primary parties were the Petitioner, homeowner Steven D. Stienstra, and the Respondent, Cedar Ridge Homeowners Association (HOA). While the dispute began over rental violations, the central issue at the hearing was the liability for legal fees the HOA incurred and asserted were owed by the Petitioner.

2. The Petitioner’s son violated Section 1.1 of the CC&Rs by listing the property on VRBO for short-term rentals (less than 30 consecutive days) and producing revenue from January to April 2018. He also later posted on Facebook Marketplace offering to rent separate units within the home, which violated the rule requiring the lease of an “owner’s entire lot.”

3. HOA President Bill Ferguson made a phone call to Mr. Stienstra in April 2018 to bring the short-term rental violations to his attention. The ALJ characterized this as a “courtesy or informational call” and not a formal enforcement action because it did not comply with the written notice procedures required by either Section 1.1 or Section 18 of the CC&Rs.

4. The first letter (May 11, 2018) demanded that Stienstra cease all rentals of less than 30 days. The second letter (June 1, 2018) added a demand for $1,500 in attorney’s fees, and the third letter (June 17, 2018) increased this demand to $2,600.

5. The key sections were Section 1.1 and Section 18. Section 1.1 governed leasing requirements (e.g., minimum 30-day term) and detailed a process for an owner to take action against a non-compliant tenant (occupant). Section 18, titled “Enforcement of Covenants,” provided the formal process for the HOA Board to take action against a non-compliant owner.

6. The ALJ concluded that Section 1.1 was inappropriate because its enforcement mechanism empowers the HOA to act “on behalf of such owner against owner’s occupant” if the owner fails to do so. In this case, the HOA was taking direct action against the owner (Stienstra) for his own violations, a scenario that the ALJ determined was governed by Section 18.

7. Under Section 18, the HOA was required to notify the owner “in writing of the breach,” provide the owner 30 days to appear before the Board to respond, and then grant a reasonable time period (not to exceed 60 days) to remedy the breach before it could levy a fine.

8. The HOA requested a rehearing on the grounds that the ALJ’s decision was “arbitrary, capricious, and an abuse of discretion, and was not support by the evidence.” The HOA specifically alleged the ALJ had not considered evidence that it had reason to believe violations were continuing and had erred in interpreting the CC&Rs.

9. The HOA argued that because the Petitioner had admittedly violated the CC&Rs, he had “unclean hands” and therefore was not entitled to seek relief from the Department regarding the HOA’s actions. The ALJ noted that the remedy sought by the Petitioner was monetary (release from fees), not equitable, and the core issue remained whether the HOA’s enforcement actions were valid under its own governing documents.

10. The final outcome, upheld on rehearing, was that the Petitioner’s petition was granted. The HOA was ordered to reimburse Mr. Stienstra for his $500 filing fee, and the ALJ concluded that the asserted legal fees were not assignable to him due to the HOA’s failure to follow its own CC&R enforcement procedures.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response to each question using only the facts and arguments presented in the provided legal decisions.

1. Analyze the procedural missteps made by the Cedar Ridge HOA Board in its enforcement actions against Steven Stienstra. How did its choice to proceed under Section 1.1 instead of Section 18 fundamentally undermine its position, according to the Administrative Law Judge?

2. Discuss the role of communication and miscommunication in escalating the conflict between Stienstra and the HOA. Use specific examples from the text, such as the Ferguson phone call, the continued VRBO listing, the HOA’s internal distrust, and the unofficial board meeting, to illustrate your points.

3. Evaluate the HOA’s argument on rehearing that its actions were protected because they acted in good faith based on the advice of their attorney, as allowed under A.R.S. § 10-3830. Why was this argument ultimately unpersuasive to the Administrative Law Judge?

4. The central issue in this case evolved from CC&R violations to a dispute over attorney’s fees. Trace this evolution, explaining how each Cease & Desist letter escalated the financial stakes and why the ALJ ultimately determined the fees were not assignable to Stienstra.

5. Compare and contrast the enforcement mechanisms detailed in Section 1.1 and Section 18 of the Cedar Ridge CC&Rs. Explain the specific purpose of each section and why applying the correct one was critical to the outcome of this case.

——————————————————————————–

Glossary

Definition

A.R.S. § 33-1806.01

An Arizona Revised Statute providing that a planned community property owner may use their property as a rental unless prohibited in the declaration and must abide by the declaration’s rental time period restrictions.

Administrative Law Judge (ALJ)

The official who presides over administrative hearings, hears evidence, and makes legal findings and rulings. In this case, the ALJ was Kay Abramsohn.

Burden of Proof

The obligation on a party in a legal case to prove their allegations. In this proceeding, the Petitioner bore the burden of proving the HOA’s violations by a preponderance of the evidence.

Covenants, Conditions, and Restrictions. The governing legal documents that set forth the rules for a planned community or homeowners association.

Cease & Desist Letter

A formal written demand from an attorney or party to stop (cease) and not restart (desist) an allegedly illegal or infringing activity.

Declaration

The legal document that creates a homeowners association and its CC&Rs.

Forcible Entry and Detainer

A legal action, often used for eviction, to recover possession of real property from someone who is in wrongful possession. Section 1.1 mentions this as an action an owner could take against a non-compliant tenant.

A legal claim or right against a property to secure the payment of a debt. Section 18 of the CC&Rs allows the HOA to place a lien on a property for an unpaid special assessment or fine.

Occupant

As used in Section 1.1, refers to a tenant or lessee under a lease agreement, distinct from the property owner.

Petitioner

The party who files a petition initiating a legal or administrative action. In this case, homeowner Steven D. Stienstra.

Preponderance of the Evidence

The standard of proof in this case, meaning that the evidence as a whole shows that the fact sought to be proved is more probable than not.

Respondent

The party against whom a petition is filed. In this case, the Cedar Ridge Homeowners Association.

Special Assessment

A charge levied by an HOA against an owner for a specific purpose, such as repaying attorney’s fees incurred by the HOA or as a fine, as described in Sections 1.1 and 18.

Unclean Hands

A legal doctrine arguing that a party who has acted unethically or in bad faith in relation to the subject of a complaint should not be entitled to seek relief. The HOA raised this argument against the Petitioner on rehearing.

An Expedia Group website containing listings for vacation property rentals, which the Petitioner’s son used to list the property.






Blog Post – 19F-H1918033-REL-RHG


Study Guide: Stienstra v. Cedar Ridge Homeowners Association

This study guide provides a comprehensive review of the administrative hearing and rehearing decisions in the case between petitioner Steven D. Stienstra and respondent Cedar Ridge Homeowners Association. It includes a short-answer quiz with an answer key, a series of essay questions for deeper analysis, and a glossary of key terms found in the legal decisions.

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing exclusively from the information provided in the case documents.

1. Who were the primary parties in this case, and what was the central issue that prompted the administrative hearing?

2. What specific violations of the CC&Rs did the homeowner, Steven Stienstra, or his son commit that initiated the dispute?

3. Describe the initial action taken by HOA President Bill Ferguson in April 2018 and explain why the Administrative Law Judge did not consider it a formal enforcement action.

4. The HOA’s attorneys sent three Cease & Desist letters. What was the primary demand of the first letter, and what financial demands were added in the second and third letters?

5. What were the two key sections of the CC&Rs at the center of the dispute, and what did each section generally govern?

6. Why did the Administrative Law Judge (ALJ) conclude that the HOA’s decision to proceed under Section 1.1 of the CC&Rs was inappropriate for the violations committed by the owner?

7. According to the ALJ’s decision, what specific procedural steps should the HOA have followed under Section 18 of the CC&Rs to properly enforce the covenants against an owner?

8. On what grounds did the Cedar Ridge HOA request a rehearing after the initial decision was issued in favor of the petitioner?

9. During the rehearing, the HOA introduced an “unclean hands” argument. What did this argument claim, and how did the ALJ respond to it?

10. What was the final, binding outcome of this case after the rehearing, including the ruling on attorney’s fees and the petitioner’s filing fee?

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Quiz Answer Key

1. The primary parties were the Petitioner, homeowner Steven D. Stienstra, and the Respondent, Cedar Ridge Homeowners Association (HOA). While the dispute began over rental violations, the central issue at the hearing was the liability for legal fees the HOA incurred and asserted were owed by the Petitioner.

2. The Petitioner’s son violated Section 1.1 of the CC&Rs by listing the property on VRBO for short-term rentals (less than 30 consecutive days) and producing revenue from January to April 2018. He also later posted on Facebook Marketplace offering to rent separate units within the home, which violated the rule requiring the lease of an “owner’s entire lot.”

3. HOA President Bill Ferguson made a phone call to Mr. Stienstra in April 2018 to bring the short-term rental violations to his attention. The ALJ characterized this as a “courtesy or informational call” and not a formal enforcement action because it did not comply with the written notice procedures required by either Section 1.1 or Section 18 of the CC&Rs.

4. The first letter (May 11, 2018) demanded that Stienstra cease all rentals of less than 30 days. The second letter (June 1, 2018) added a demand for $1,500 in attorney’s fees, and the third letter (June 17, 2018) increased this demand to $2,600.

5. The key sections were Section 1.1 and Section 18. Section 1.1 governed leasing requirements (e.g., minimum 30-day term) and detailed a process for an owner to take action against a non-compliant tenant (occupant). Section 18, titled “Enforcement of Covenants,” provided the formal process for the HOA Board to take action against a non-compliant owner.

6. The ALJ concluded that Section 1.1 was inappropriate because its enforcement mechanism empowers the HOA to act “on behalf of such owner against owner’s occupant” if the owner fails to do so. In this case, the HOA was taking direct action against the owner (Stienstra) for his own violations, a scenario that the ALJ determined was governed by Section 18.

7. Under Section 18, the HOA was required to notify the owner “in writing of the breach,” provide the owner 30 days to appear before the Board to respond, and then grant a reasonable time period (not to exceed 60 days) to remedy the breach before it could levy a fine.

8. The HOA requested a rehearing on the grounds that the ALJ’s decision was “arbitrary, capricious, and an abuse of discretion, and was not support by the evidence.” The HOA specifically alleged the ALJ had not considered evidence that it had reason to believe violations were continuing and had erred in interpreting the CC&Rs.

9. The HOA argued that because the Petitioner had admittedly violated the CC&Rs, he had “unclean hands” and therefore was not entitled to seek relief from the Department regarding the HOA’s actions. The ALJ noted that the remedy sought by the Petitioner was monetary (release from fees), not equitable, and the core issue remained whether the HOA’s enforcement actions were valid under its own governing documents.

10. The final outcome, upheld on rehearing, was that the Petitioner’s petition was granted. The HOA was ordered to reimburse Mr. Stienstra for his $500 filing fee, and the ALJ concluded that the asserted legal fees were not assignable to him due to the HOA’s failure to follow its own CC&R enforcement procedures.

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Essay Questions

Instructions: The following questions are designed for a more in-depth analysis of the case. Formulate a comprehensive response to each question using only the facts and arguments presented in the provided legal decisions.

1. Analyze the procedural missteps made by the Cedar Ridge HOA Board in its enforcement actions against Steven Stienstra. How did its choice to proceed under Section 1.1 instead of Section 18 fundamentally undermine its position, according to the Administrative Law Judge?

2. Discuss the role of communication and miscommunication in escalating the conflict between Stienstra and the HOA. Use specific examples from the text, such as the Ferguson phone call, the continued VRBO listing, the HOA’s internal distrust, and the unofficial board meeting, to illustrate your points.

3. Evaluate the HOA’s argument on rehearing that its actions were protected because they acted in good faith based on the advice of their attorney, as allowed under A.R.S. § 10-3830. Why was this argument ultimately unpersuasive to the Administrative Law Judge?

4. The central issue in this case evolved from CC&R violations to a dispute over attorney’s fees. Trace this evolution, explaining how each Cease & Desist letter escalated the financial stakes and why the ALJ ultimately determined the fees were not assignable to Stienstra.

5. Compare and contrast the enforcement mechanisms detailed in Section 1.1 and Section 18 of the Cedar Ridge CC&Rs. Explain the specific purpose of each section and why applying the correct one was critical to the outcome of this case.

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Glossary

Definition

A.R.S. § 33-1806.01

An Arizona Revised Statute providing that a planned community property owner may use their property as a rental unless prohibited in the declaration and must abide by the declaration’s rental time period restrictions.

Administrative Law Judge (ALJ)

The official who presides over administrative hearings, hears evidence, and makes legal findings and rulings. In this case, the ALJ was Kay Abramsohn.

Burden of Proof

The obligation on a party in a legal case to prove their allegations. In this proceeding, the Petitioner bore the burden of proving the HOA’s violations by a preponderance of the evidence.

Covenants, Conditions, and Restrictions. The governing legal documents that set forth the rules for a planned community or homeowners association.

Cease & Desist Letter

A formal written demand from an attorney or party to stop (cease) and not restart (desist) an allegedly illegal or infringing activity.

Declaration

The legal document that creates a homeowners association and its CC&Rs.

Forcible Entry and Detainer

A legal action, often used for eviction, to recover possession of real property from someone who is in wrongful possession. Section 1.1 mentions this as an action an owner could take against a non-compliant tenant.

A legal claim or right against a property to secure the payment of a debt. Section 18 of the CC&Rs allows the HOA to place a lien on a property for an unpaid special assessment or fine.

Occupant

As used in Section 1.1, refers to a tenant or lessee under a lease agreement, distinct from the property owner.

Petitioner

The party who files a petition initiating a legal or administrative action. In this case, homeowner Steven D. Stienstra.

Preponderance of the Evidence

The standard of proof in this case, meaning that the evidence as a whole shows that the fact sought to be proved is more probable than not.

Respondent

The party against whom a petition is filed. In this case, the Cedar Ridge Homeowners Association.

Special Assessment

A charge levied by an HOA against an owner for a specific purpose, such as repaying attorney’s fees incurred by the HOA or as a fine, as described in Sections 1.1 and 18.

Unclean Hands

A legal doctrine arguing that a party who has acted unethically or in bad faith in relation to the subject of a complaint should not be entitled to seek relief. The HOA raised this argument against the Petitioner on rehearing.

An Expedia Group website containing listings for vacation property rentals, which the Petitioner’s son used to list the property.


Case Participants

Petitioner Side

  • Steven D. Stienstra (petitioner)
    Appeared on his own behalf,.
  • Petitioner's son (witness)
    Related to Petitioner
    Managed rental property listings (referred to as 'Son'),,; testified at hearing,.

Respondent Side

  • Michelle Molinario (HOA attorney)
    Jones, Skelton & Hochuli, PLC.
    Represented Cedar Ridge Homeowners Association,.
  • Keith D. Collett (HOA attorney)
    Jones, Skelton & Hochuli, PLC.
    Represented Cedar Ridge Homeowners Association/HOA,,.
  • Diana J. Elston (HOA attorney)
    Jones, Skelton & Hochuli, P.L.C.
    Represented Cedar Ridge Homeowners Association/HOA,.
  • Vic Burolla (board member)
    Cedar Ridge Homeowners Association
    HOA Board Secretary,,; witness at initial hearing,,; no longer Secretary by time of hearing,.
  • Bill Ferguson (board member)
    Cedar Ridge Homeowners Association
    HOA Board President,; no longer President by time of hearing,; witness at initial hearing.
  • Tucker (board member)
    Cedar Ridge Homeowners Association
    HOA Board Vice-president,; participated in September 4, 2018 meeting,.
  • Griffin (board member)
    Cedar Ridge Homeowners Association
    HOA Board Treasurer,; participated in September 4, 2018 meeting,.
  • Dick Ellis (board member)
    Cedar Ridge Homeowners Association
    May have attended portion of September 4, 2018 meeting,.

Neutral Parties

  • Kay Abramsohn (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge,,.
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
    Commissioner,,.

Stienstra, Steven D. vs. Cedar Ridge Homeowners Association

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Case Summary

Case ID 19F-H1918033-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2020-04-01
Administrative Law Judge Kay Abramsohn
Outcome total
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Steven D. Stienstra Counsel —
Respondent Cedar Ridge Homeowners Association Counsel Michelle Molinario, Diana J. Elston, Keith D. Collett

Alleged Violations

A.R.S. § 33-1806.01; CC&Rs Section 1.1; CC&Rs Section 18

Outcome Summary

The Petitioner was the prevailing party. The ALJ affirmed that the HOA violated its CC&Rs regarding enforcement procedures, particularly by failing to adhere to Section 18 requirements and incorrectly applying Section 1.1 against the owner, rendering the legal fee demands improper. The HOA was ordered to reimburse the Petitioner the $500.00 filing fee,.

Why this result: The HOA failed to follow the explicit due process requirements (written notice and 30 days to appear) mandated by CC&Rs Section 18 for enforcement against the owner, and incorrectly relied on Section 1.1 to justify its demand for unauthorized flat fees,,,,.

Key Issues & Findings

HOA enforcement action regarding CC&R violations and asserted legal fees

Petitioner challenged the HOA's enforcement actions regarding short-term rentals and leasing less than the entire lot. The ALJ found the HOA proceeded inappropriately under Section 1.1 (intended for action against occupants on the owner's behalf) and failed to follow the mandatory enforcement requirements of Section 18, thus violating its own CC&Rs. Consequently, the asserted legal fees were not assigned to Petitioner,,,.

Orders: The Petition was granted. The HOA was ordered to reimburse the Petitioner the $500.00 filing fee,. The asserted legal fees of $1,500 and $2,600 sought by the HOA were determined not to be assignable to the Petitioner,.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1806.01
  • CC&Rs Section 1.1
  • CC&Rs Section 18

Analytics Highlights

Topics: HOA Enforcement, CC&R Violation, Legal Fees, Due Process, Rental Restriction
Additional Citations:

  • A.R.S. § 33-1806.01
  • CC&Rs Section 1.1
  • CC&Rs Section 18
  • A.R.S. § 10-3830

Decision Documents

19F-H1918033-REL Decision – 753362.pdf

Uploaded 2025-12-17T18:17:14 (169.0 KB)

Case Participants

Petitioner Side

  • Steven D. Stienstra (petitioner)
    Appeared on his own behalf for the hearing and rehearing.
  • Petitioner's son (witness/property manager)
    Managed rental schedule and set up VRBO account; lived in the home.

Respondent Side

  • Michelle Molinario (HOA attorney)
    Jones, Skelton & Hochuli, PLC.
    Represented the HOA at the initial hearing.
  • Keith D. Collett (HOA attorney)
    Jones, Skelton & Hochuli, P.L.C.
    Represented the HOA at the hearing and rehearing.
  • Diana J. Elston (HOA attorney)
    Jones, Skelton & Hochuli, P.L.C.
    Represented the HOA at the rehearing.
  • Vic Burolla (board member/witness)
    Cedar Ridge Homeowners Association
    Former HOA Secretary; testified and attended the September 4, 2018 meeting.
  • Bill Ferguson (board member/witness)
    Cedar Ridge Homeowners Association
    Former HOA Board President; initiated the initial phone call to Petitioner about the violation.
  • Tucker (board member/vice-president)
    Cedar Ridge Homeowners Association
    HOA Vice-president; attended the September 4, 2018 meeting.
  • Griffin (board member/treasurer)
    Cedar Ridge Homeowners Association
    HOA Treasurer; attended the September 4, 2018 meeting.
  • Dick Ellis (board member)
    Cedar Ridge Homeowners Association
    May have attended the September 4, 2018 meeting.

Neutral Parties

  • Kay Abramsohn (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge for the Decision and Rehearing Decision.
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Commissioner.