Tag Archives: A.R.S. § 41-1092.09

Annette Cohen vs. CBS 136 Homeowners Association

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Case Summary

Case ID 18F-H1818033-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-06-26
Administrative Law Judge Tammy L. Eigenheer
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Annette Cohen Counsel —
Respondent CBS 136 Homeowners Association Counsel Brian E. Ditsch

Alleged Violations

A.R.S. § 33-1258(A)

Outcome Summary

Petitioner was deemed the prevailing party because Respondent established a technical violation of A.R.S. § 33-1258(A) by failing to provide requested documents within the 10-day limit. However, the Administrative Law Judge found a civil penalty was not appropriate given the circumstances.

Key Issues & Findings

Failure to provide requested association records within 10 business days

Petitioner requested sign-in sheets for the January 10, 2018, and February 15, 2018, CBS HOA meetings. Respondent acknowledged a technical violation of the statute by failing to provide the requested documents within the required 10-day timeframe, although they were ultimately provided prior to the hearing.

Orders: Respondent must comply with the applicable provisions of A.R.S. § 33-1258(A) in the future, and pay Petitioner her filing fee of $500.00 within thirty (30) days.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1258
  • A.R.S. § 33-1258(A)

Analytics Highlights

Topics: records request, failure to provide documents, condominium owners association, filing fee refund
Additional Citations:

  • A.R.S. § 32-2199 et seq.
  • A.R.S. § 33-1258
  • A.A.C. R2-19-119
  • A.R.S. § 33-1258(A)
  • A.R.S. §32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Audio Overview

Decision Documents

18F-H1818033-REL Decision – 642888.pdf

Uploaded 2025-10-09T03:32:41 (74.5 KB)

18F-H1818033-REL Decision – 655537.pdf

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Briefing Doc – 18F-H1818033-REL


Administrative Hearing Briefing: Cohen v. CBS 136 Homeowners Association

Executive Summary

This document synthesizes the findings and decision from the administrative hearing case Annette Cohen v. CBS 136 Homeowners Association (No. 18F-H1818033-REL). The core of the dispute was the Homeowners Association’s (HOA) failure to provide requested documents—specifically, meeting sign-in sheets—to a member, Annette Cohen, within the ten-business-day timeframe mandated by Arizona statute A.R.S. § 33-1258.

At the hearing, the Respondent HOA acknowledged this “technical violation,” attributing the delay to operational difficulties arising from a recent change in management companies. The Petitioner, Ms. Cohen, argued the delay was intentional and warranted a civil penalty.

The Administrative Law Judge, Tammy L. Eigenheer, found that the HOA did violate the statute. In the final order, the Judge declared Ms. Cohen the prevailing party and mandated future compliance by the HOA. While a civil penalty was deemed inappropriate under the circumstances, the Judge ordered the HOA to reimburse Ms. Cohen’s $500 filing fee.

Case Overview

Entity / Individual

Petitioner

Annette Cohen

Respondent

CBS 136 Homeowners Association (CBS)

Respondent’s Counsel

Brian Ditsch, Sacks Tierney P.A.

Respondent’s Mgmt. Co.

Key Witness

Susan Rubin (PRM)

Adjudicating Body

Office of Administrative Hearings, Phoenix, Arizona

Administrative Law Judge

Tammy L. Eigenheer

Case Number

18F-H1818033-REL

Hearing Date

June 6, 2018

Decision Date

June 26, 2018

Chronology of the Dispute

The dispute centered on two separate sets of document requests made by Petitioner Annette Cohen.

• Request 1 (January 10 Meeting):

◦ On or about Jan. 10, 2018: Ms. Cohen requested the sign-in sheets from the annual meeting held on this date.

◦ Jan. 2018: The management company PRM took over management of the CBS 136 HOA.

◦ Feb. 15, 2018: After more than a month, and after two scheduled review appointments were cancelled by the management company, the sign-in sheets were finally provided to Ms. Cohen by email.

• Request 2 (February 15 Meeting):

◦ Feb. 19, 2018: Ms. Cohen requested the sign-in sheets from the February 15, 2018 HOA meeting. Receipt of this request was acknowledged by PRM.

◦ Feb. 21, 26, 27 & March 5, 2018: Ms. Cohen made repeated follow-up requests for the same information.

• Formal Proceedings:

◦ March 9, 2018: Ms. Cohen filed a formal petition with the Arizona Department of Real Estate.

◦ April 10, 2018: The Respondent HOA filed an answer denying all allegations.

◦ June 6, 2018: An administrative hearing was held. The documents had been provided to Ms. Cohen at some point prior to this hearing.

◦ June 26, 2018: The Administrative Law Judge issued the final decision.

Core Allegation and Legal Framework

Petitioner’s Allegation

Annette Cohen alleged that the CBS 136 Homeowners Association violated A.R.S. Title 33, Chapter 16, Section 33-1258 by failing to provide association records for review and copying within the statutorily required timeframe.

Governing Statute: A.R.S. § 33-1258(A)

The legal basis for the petition is Arizona Revised Statute § 33-1258(A), which governs a member’s right to access association records. The statute states, in relevant part:

“all financial and other records of the association shall be made reasonably available for examination by any member… The association shall have ten business days to fulfill a request for examination. On request for purchase of copies of records by any member… the association shall have ten business days to provide copies of the requested records. An association may charge a fee for making copies of not more than fifteen cents per page.”

The petitioner bears the burden of proving a violation by a preponderance of the evidence, defined as evidence that “shows that the fact sought to be proved is more probable than not.”

Arguments and Evidence Presented at Hearing

Once the Respondent acknowledged the delay, the hearing focused solely on determining the appropriate remedy.

Petitioner’s Position (Annette Cohen)

• Intentional Negligence: Ms. Cohen argued that the Respondent “intentionally ignored her request for the documents.”

• Request for Penalty: Based on the belief of intentional neglect, she asserted that a civil penalty was an appropriate remedy.

• Unreasonable Delay: She noted that the documents “could have easily been emailed to her within the 10 day deadline,” but that the HOA’s management company did not present this as an option until after the deadline had already passed.

Respondent’s Position (CBS 136 HOA)

• Acknowledged Violation: At the June 6, 2018 hearing, the Respondent “acknowledged that the requested documents were not provided within the 10 day timeframe set forth in statute.”

• Mitigating Circumstances: The defense centered on testimony from Susan Rubin of the management company, PRM. Ms. Rubin testified to the following:

◦ No requests are “ever purposefully ignored.”

◦ PRM had only taken over management of the HOA in January 2018.

◦ At the time of the requests, PRM was “still getting documents from the former management company.”

◦ The delay was not due to ignoring the request, but because it “took a little longer than expected to provide the documents.”

Administrative Law Judge’s Decision and Order

Findings and Conclusions

• Violation Established: The Judge concluded there was “no dispute that Respondent failed to provide the requested documents within 10 days.” Therefore, the Petitioner “established by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”

• Rejection of Civil Penalty: Despite the Petitioner’s argument, the Administrative Law Judge did “not find such a penalty to be appropriate given the circumstances in this matter.”

Final Order

The Judge issued a three-part order binding on the parties:

1. Prevailing Party: The Petitioner, Annette Cohen, is “deemed the prevailing party.”

2. Future Compliance: The Respondent, CBS 136 Homeowners Association, is ordered to “comply with the applicable provisions of A.R.S. § 33-1258(A) in the future.”

3. Reimbursement of Filing Fee: The Respondent must pay the Petitioner her filing fee of $500.00 directly to her within thirty (30) days of the order.


Debbie Westerman v. Bridgewood Townhomes

Posted on by

Case Summary

Case ID 18F-H1818028-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-04-26
Administrative Law Judge Diane Mihalsky
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Debbie Westerman Counsel —
Respondent Bridgewood Nine 30 Property Owners Association, Inc. aka Bridgewood Townhomes Counsel Mark E. Lines and R. Patrick Whelan

Alleged Violations

CC&R § 5(G)

Outcome Summary

The ALJ denied the petition, concluding the Respondent HOA did not unreasonably deny the Petitioner's architectural request. The HOA's standard specification requiring 4” x 8” x 16” CMU blocks for courtyard walls was found to be reasonable for maintaining architectural continuity consistent with the original Al Beadle design of the community.

Why this result: Petitioner failed to prove that the HOA's denial was unreasonable or that the specified 4” x 8” x 16” CMU block was inferior to the 8” x 8” x 16” CMU block she requested, and compliance with the HOA's reasonable specifications was required.

Key Issues & Findings

Unreasonable denial of architectural request to build a courtyard wall

Petitioner alleged the HOA violated CC&R § 5(G) by unreasonably denying her request to construct a courtyard wall using 8” x 8” x 16” CMU blocks, which did not comply with the HOA's Wall Construction Specifications & Conditions requiring 4” x 8” x 16” CMU blocks.

Orders: Petition denied because Petitioner failed to establish that CC&R § 5(G) required the Respondent to approve her Architectural Request which did not comply with Respondent’s Wall Construction Specifications & Conditions.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09
  • CC&R § 5(G)
  • CC&R § 7(B)
  • CC&R § 5(J)

Analytics Highlights

Topics: HOA, CC&R, Architectural Review, Wall Construction, CMU block, Architectural Standard
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09
  • Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
  • Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo. App. 1993)

Audio Overview

Decision Documents

18F-H1818028-REL Decision – 631265.pdf

Uploaded 2025-10-08T07:04:42 (161.6 KB)





Briefing Doc – 18F-H1818028-REL


Briefing Document: Westerman v. Bridgewood Townhomes HOA (Case No. 18F-H1818028-REL)

Executive Summary

This document synthesizes the findings and decision in the case of Debbie Westerman versus the Bridgewood Nine 30 Property Owners Association, Inc. (HOA). The central conflict involved the HOA’s denial of Ms. Westerman’s architectural request to construct a courtyard wall using 8” x 8” x 16” concrete masonry unit (CMU) blocks, which deviated from the association’s established standard of 4” x 8” x 16” CMU blocks.

The Administrative Law Judge (ALJ) ultimately denied the petitioner’s claim, ruling in favor of the HOA. The decision rested on the finding that the HOA’s architectural standards were reasonable and established to maintain the community’s original design integrity. The petitioner failed to meet the burden of proof required to show that the HOA’s denial was unreasonable or that the specified building materials were in any significant way inferior. The HOA successfully argued that its “Wall Construction Specifications & Conditions,” in place since 2005, were created to preserve the architectural continuity of the original “Al Beadle design” and have been consistently applied to numerous other homeowner projects.

1. Case Overview and Core Dispute

• Parties:

◦ Petitioner: Debbie Westerman, owner of condominium unit 31 in Bridgewood Townhomes.

◦ Respondent: Bridgewood Nine 30 Property Owners Association, Inc. (also known as Bridgewood Townhomes).

• Jurisdiction: The case was heard by the Arizona Office of Administrative Hearings following a petition filed with the Arizona Department of Real Estate on January 23, 2018.

• Core Allegation: The petitioner alleged that the HOA violated its Covenants, Conditions, and Restrictions (CC&Rs) § 5(G) by unreasonably denying her request to build a courtyard wall with 8” x 8” x 16” CMU blocks. The HOA’s established specification required the use of 4” x 8” x 16” CMU blocks.

2. Chronology of the Dispute

The key events leading to the administrative hearing occurred between October 2017 and January 2018.

Oct 25, 2017

Michael Brubaker, the HOA Board President, emailed the petitioner with the association’s “Wall Construction Specifications & Conditions.”

Oct 25, 2017

The petitioner submitted an Architectural Request to build a wall with 8″ x 8″ x 16″ CMU blocks, acknowledging the deviation from specifications.

Oct 25, 2017

Mr. Brubaker sent a follow-up email cautioning the petitioner not to pre-order non-conforming materials as her request was not yet approved.

Nov 29, 2017

Mr. Brubaker emailed the petitioner, acknowledging her request as “extraordinary” and stating the Board would need to meet to consider it.

Dec 28, 2017

The petitioner was formally notified of a Board meeting scheduled for January 2, 2018, to review her request.

Jan 2, 2018

The petitioner attended the Board meeting. The Board unanimously rejected her request because it was contrary to the established specifications and “the historical aspects of our compliance structure.” The Board noted its willingness to approve a compliant wall, but the petitioner “stated that she [was] unwilling to comply.”

Jan 8, 2018

The HOA’s attorney sent a letter to the petitioner summarizing the legal basis for the denial.

Jan 23, 2018

The petitioner filed her formal petition with the Arizona Department of Real Estate.

3. Petitioner’s Arguments and Evidence (Debbie Westerman)

The petitioner’s case was built on three main arguments: the superiority of her proposed materials, the inconsistency of community standards, and the questionable validity of the HOA’s rules.

• Material Superiority: The petitioner claimed her proposed 8” x 8” x 16” blocks were stronger, less expensive, and visually identical to the required blocks.

◦ Evidence: She testified that three different contractors advised her that the larger blocks would be cheaper due to needing fewer units and less mortar.

◦ Evidence: Her subcontractor, Richard Ross, testified that using twice as many blocks (as required by the 4″ specification) “doubles the chance of the wall failing.”

• Inconsistent Community Standards: The petitioner argued that the HOA did not enforce a uniform aesthetic, negating the need for strict adherence to the block size specification.

◦ Evidence: She submitted photographs (Exhibits A5, A6) of walls at units 34 and 38, owned by Board President Michael Brubaker, which she claimed were built with larger blocks visible through stucco.

◦ Evidence: She submitted a photograph (Exhibit A11) showing courtyard walls of different heights, although wall height was not the subject of her dispute.

• Questionable Rule Authenticity: At the hearing, the petitioner challenged the validity of the “Wall Construction Specifications & Conditions” document itself.

◦ Argument: She argued the document was not authentic because the HOA did not produce the official Board meeting minutes from 2005 when the rules were allegedly adopted. This challenge was raised for the first time at the hearing.

4. Respondent’s Arguments and Evidence (Bridgewood HOA)

The HOA’s defense was centered on its legal authority, the reasonableness of its established architectural standards, and the consistent enforcement of its rules.

• Adherence to Established Architectural Standards: The HOA’s primary defense was that its denial was based on a reasonable and long-standing architectural rule.

◦ Authority: The HOA cited CC&R § 5(J), which grants the Board the authority to adopt reasonable rules concerning the use of common elements. Rule 7(a) requires Board approval for any exterior alterations.

◦ Evidence: The HOA submitted the “Wall Construction Specifications & Conditions” (Exhibit 3), which Mr. Brubaker credibly testified was adopted by the Board on March 22, 2005.

◦ Purpose of the Rule: Mr. Brubaker stated the rule’s purpose was to ensure architectural continuity. An email to the petitioner (Exhibit 7) explained:

• Consistent Enforcement: The HOA demonstrated that the rule was not arbitrary but had been consistently applied.

◦ Evidence: Mr. Brubaker testified that since the program’s adoption, “twenty-nine homeowners have had applications approved and constructed courtyard walls to specification.” Four additional compliant applications were approved since the petitioner’s submission. A photograph of a recently completed, compliant wall (Ms. Warren’s) was submitted as Exhibit 16.

• Rebuttal of Petitioner’s Claims: The HOA directly countered the petitioner’s key arguments.

◦ On Inconsistency: Mr. Brubaker testified that the non-conforming walls at units 34 and 38 were constructed before 1980 by the original developer, prior to the HOA assuming control of the property (Exhibit 14).

◦ On Structural Integrity: The HOA submitted two technical bulletins from the National Concrete Masonry Association (Exhibits 19 and 20). These documents stated that 4″ high (“half-high”) units can be considered “structurally equivalent to their corresponding 8-in. (203-mm) high unit” as long as the cross-section is the same.

◦ On Cost: The HOA submitted a bid from J E Bowen Construction for $6,165.00 to build a compliant wall for the petitioner’s unit (Exhibit 17). It also noted that another homeowner’s recent compliant wall cost only $4,268.23 (Exhibit 15).

5. Administrative Law Judge’s Conclusions and Final Order

The Administrative Law Judge (ALJ) found comprehensively in favor of the Respondent (HOA), denying the Petitioner’s petition.

• Burden of Proof: The ALJ established that the petitioner bore the burden of proving her case by a “preponderance of the evidence” and failed to do so.

• Reasonableness of HOA Standards: The decision affirmed the HOA’s right to establish and enforce aesthetic standards.

• Validity of Specifications: The petitioner’s challenge to the authenticity of the HOA’s rules was dismissed. The ALJ found that she “did not establish that Respondent’s Wall Construction Specifications & Conditions was fraudulent or improperly adopted.”

• Materiality of Block Type: The ALJ concluded that the petitioner failed to prove her central claim that the larger blocks were superior.

• Aesthetic Impact: The ALJ determined that the petitioner’s proposed wall would violate the community’s aesthetic standards, noting that a wall using the larger blocks “would be noticeably different from walls that were constructed in compliance with the Wall Construction Specifications & Conditions and other Al Beadle design elements.”

Final Order: “IT IS ORDERED that Petitioners’ petition is denied because she has not established that CC&R § 5(G) required the Respondent to approve her Architectural Request to build a block wall around her patio that did not comply with Respondent’s Wall Construction Specifications & Conditions.”

The order, issued on April 26, 2018, is binding unless a rehearing is requested within 30 days of service.


Debbie Westerman v. Bridgewood Townhomes

Posted on by

Case Summary

Case ID 18F-H1818028-REL
Agency ADRE
Tribunal OAH
Decision Date 2018-04-26
Administrative Law Judge Diane Mihalsky
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Debbie Westerman Counsel —
Respondent Bridgewood Nine 30 Property Owners Association, Inc. aka Bridgewood Townhomes Counsel Mark E. Lines and R. Patrick Whelan

Alleged Violations

CC&R § 5(G)

Outcome Summary

The ALJ denied the petition, concluding the Respondent HOA did not unreasonably deny the Petitioner's architectural request. The HOA's standard specification requiring 4” x 8” x 16” CMU blocks for courtyard walls was found to be reasonable for maintaining architectural continuity consistent with the original Al Beadle design of the community.

Why this result: Petitioner failed to prove that the HOA's denial was unreasonable or that the specified 4” x 8” x 16” CMU block was inferior to the 8” x 8” x 16” CMU block she requested, and compliance with the HOA's reasonable specifications was required.

Key Issues & Findings

Unreasonable denial of architectural request to build a courtyard wall

Petitioner alleged the HOA violated CC&R § 5(G) by unreasonably denying her request to construct a courtyard wall using 8” x 8” x 16” CMU blocks, which did not comply with the HOA's Wall Construction Specifications & Conditions requiring 4” x 8” x 16” CMU blocks.

Orders: Petition denied because Petitioner failed to establish that CC&R § 5(G) required the Respondent to approve her Architectural Request which did not comply with Respondent’s Wall Construction Specifications & Conditions.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09
  • CC&R § 5(G)
  • CC&R § 7(B)
  • CC&R § 5(J)

Analytics Highlights

Topics: HOA, CC&R, Architectural Review, Wall Construction, CMU block, Architectural Standard
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09
  • Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
  • Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo. App. 1993)

Audio Overview

Decision Documents

18F-H1818028-REL Decision – 631265.pdf

Uploaded 2025-10-09T03:32:31 (161.6 KB)





Briefing Doc – 18F-H1818028-REL


Briefing Document: Westerman v. Bridgewood Townhomes HOA (Case No. 18F-H1818028-REL)

Executive Summary

This document synthesizes the findings and decision in the case of Debbie Westerman versus the Bridgewood Nine 30 Property Owners Association, Inc. (HOA). The central conflict involved the HOA’s denial of Ms. Westerman’s architectural request to construct a courtyard wall using 8” x 8” x 16” concrete masonry unit (CMU) blocks, which deviated from the association’s established standard of 4” x 8” x 16” CMU blocks.

The Administrative Law Judge (ALJ) ultimately denied the petitioner’s claim, ruling in favor of the HOA. The decision rested on the finding that the HOA’s architectural standards were reasonable and established to maintain the community’s original design integrity. The petitioner failed to meet the burden of proof required to show that the HOA’s denial was unreasonable or that the specified building materials were in any significant way inferior. The HOA successfully argued that its “Wall Construction Specifications & Conditions,” in place since 2005, were created to preserve the architectural continuity of the original “Al Beadle design” and have been consistently applied to numerous other homeowner projects.

1. Case Overview and Core Dispute

• Parties:

◦ Petitioner: Debbie Westerman, owner of condominium unit 31 in Bridgewood Townhomes.

◦ Respondent: Bridgewood Nine 30 Property Owners Association, Inc. (also known as Bridgewood Townhomes).

• Jurisdiction: The case was heard by the Arizona Office of Administrative Hearings following a petition filed with the Arizona Department of Real Estate on January 23, 2018.

• Core Allegation: The petitioner alleged that the HOA violated its Covenants, Conditions, and Restrictions (CC&Rs) § 5(G) by unreasonably denying her request to build a courtyard wall with 8” x 8” x 16” CMU blocks. The HOA’s established specification required the use of 4” x 8” x 16” CMU blocks.

2. Chronology of the Dispute

The key events leading to the administrative hearing occurred between October 2017 and January 2018.

Oct 25, 2017

Michael Brubaker, the HOA Board President, emailed the petitioner with the association’s “Wall Construction Specifications & Conditions.”

Oct 25, 2017

The petitioner submitted an Architectural Request to build a wall with 8″ x 8″ x 16″ CMU blocks, acknowledging the deviation from specifications.

Oct 25, 2017

Mr. Brubaker sent a follow-up email cautioning the petitioner not to pre-order non-conforming materials as her request was not yet approved.

Nov 29, 2017

Mr. Brubaker emailed the petitioner, acknowledging her request as “extraordinary” and stating the Board would need to meet to consider it.

Dec 28, 2017

The petitioner was formally notified of a Board meeting scheduled for January 2, 2018, to review her request.

Jan 2, 2018

The petitioner attended the Board meeting. The Board unanimously rejected her request because it was contrary to the established specifications and “the historical aspects of our compliance structure.” The Board noted its willingness to approve a compliant wall, but the petitioner “stated that she [was] unwilling to comply.”

Jan 8, 2018

The HOA’s attorney sent a letter to the petitioner summarizing the legal basis for the denial.

Jan 23, 2018

The petitioner filed her formal petition with the Arizona Department of Real Estate.

3. Petitioner’s Arguments and Evidence (Debbie Westerman)

The petitioner’s case was built on three main arguments: the superiority of her proposed materials, the inconsistency of community standards, and the questionable validity of the HOA’s rules.

• Material Superiority: The petitioner claimed her proposed 8” x 8” x 16” blocks were stronger, less expensive, and visually identical to the required blocks.

◦ Evidence: She testified that three different contractors advised her that the larger blocks would be cheaper due to needing fewer units and less mortar.

◦ Evidence: Her subcontractor, Richard Ross, testified that using twice as many blocks (as required by the 4″ specification) “doubles the chance of the wall failing.”

• Inconsistent Community Standards: The petitioner argued that the HOA did not enforce a uniform aesthetic, negating the need for strict adherence to the block size specification.

◦ Evidence: She submitted photographs (Exhibits A5, A6) of walls at units 34 and 38, owned by Board President Michael Brubaker, which she claimed were built with larger blocks visible through stucco.

◦ Evidence: She submitted a photograph (Exhibit A11) showing courtyard walls of different heights, although wall height was not the subject of her dispute.

• Questionable Rule Authenticity: At the hearing, the petitioner challenged the validity of the “Wall Construction Specifications & Conditions” document itself.

◦ Argument: She argued the document was not authentic because the HOA did not produce the official Board meeting minutes from 2005 when the rules were allegedly adopted. This challenge was raised for the first time at the hearing.

4. Respondent’s Arguments and Evidence (Bridgewood HOA)

The HOA’s defense was centered on its legal authority, the reasonableness of its established architectural standards, and the consistent enforcement of its rules.

• Adherence to Established Architectural Standards: The HOA’s primary defense was that its denial was based on a reasonable and long-standing architectural rule.

◦ Authority: The HOA cited CC&R § 5(J), which grants the Board the authority to adopt reasonable rules concerning the use of common elements. Rule 7(a) requires Board approval for any exterior alterations.

◦ Evidence: The HOA submitted the “Wall Construction Specifications & Conditions” (Exhibit 3), which Mr. Brubaker credibly testified was adopted by the Board on March 22, 2005.

◦ Purpose of the Rule: Mr. Brubaker stated the rule’s purpose was to ensure architectural continuity. An email to the petitioner (Exhibit 7) explained:

• Consistent Enforcement: The HOA demonstrated that the rule was not arbitrary but had been consistently applied.

◦ Evidence: Mr. Brubaker testified that since the program’s adoption, “twenty-nine homeowners have had applications approved and constructed courtyard walls to specification.” Four additional compliant applications were approved since the petitioner’s submission. A photograph of a recently completed, compliant wall (Ms. Warren’s) was submitted as Exhibit 16.

• Rebuttal of Petitioner’s Claims: The HOA directly countered the petitioner’s key arguments.

◦ On Inconsistency: Mr. Brubaker testified that the non-conforming walls at units 34 and 38 were constructed before 1980 by the original developer, prior to the HOA assuming control of the property (Exhibit 14).

◦ On Structural Integrity: The HOA submitted two technical bulletins from the National Concrete Masonry Association (Exhibits 19 and 20). These documents stated that 4″ high (“half-high”) units can be considered “structurally equivalent to their corresponding 8-in. (203-mm) high unit” as long as the cross-section is the same.

◦ On Cost: The HOA submitted a bid from J E Bowen Construction for $6,165.00 to build a compliant wall for the petitioner’s unit (Exhibit 17). It also noted that another homeowner’s recent compliant wall cost only $4,268.23 (Exhibit 15).

5. Administrative Law Judge’s Conclusions and Final Order

The Administrative Law Judge (ALJ) found comprehensively in favor of the Respondent (HOA), denying the Petitioner’s petition.

• Burden of Proof: The ALJ established that the petitioner bore the burden of proving her case by a “preponderance of the evidence” and failed to do so.

• Reasonableness of HOA Standards: The decision affirmed the HOA’s right to establish and enforce aesthetic standards.

• Validity of Specifications: The petitioner’s challenge to the authenticity of the HOA’s rules was dismissed. The ALJ found that she “did not establish that Respondent’s Wall Construction Specifications & Conditions was fraudulent or improperly adopted.”

• Materiality of Block Type: The ALJ concluded that the petitioner failed to prove her central claim that the larger blocks were superior.

• Aesthetic Impact: The ALJ determined that the petitioner’s proposed wall would violate the community’s aesthetic standards, noting that a wall using the larger blocks “would be noticeably different from walls that were constructed in compliance with the Wall Construction Specifications & Conditions and other Al Beadle design elements.”

Final Order: “IT IS ORDERED that Petitioners’ petition is denied because she has not established that CC&R § 5(G) required the Respondent to approve her Architectural Request to build a block wall around her patio that did not comply with Respondent’s Wall Construction Specifications & Conditions.”

The order, issued on April 26, 2018, is binding unless a rehearing is requested within 30 days of service.


Charles Mandela vs. Blue Ridge Estates Homeowner Association

Posted on by

Case Summary

Case ID 18F-H1817006-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-12-06
Administrative Law Judge Diane Mihalsky
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Charles Mandela Counsel —
Respondent Blue Ridge Estates Homeowner Association Counsel Brian C. Axt, Esq.

Alleged Violations

CC&Rs § 3.1(a); Architectural Committee Aligned Standard 3(D)

Outcome Summary

The Administrative Law Judge denied the homeowner's petition, finding that the HOA did not violate its CC&Rs by allowing play structures on properties that already contained a detached garage or shed, because play structures are not easily convertible into a second residence, which was the underlying concern of the relevant CC&R section.

Why this result: Petitioner failed to establish by a preponderance of the evidence that Respondent violated CC&R § 3.1. The ALJ determined that the HOA correctly clarified the status of play structures through an amendment to the Architectural Committee's regulations.

Key Issues & Findings

Alleged violation of CC&Rs § 3.1(a) and Architectural Committee regulation 3(D) regarding allowing play structures (swing sets, treehouses) when another detached structure (garage or shed) is present.

Petitioner alleged that the Respondent HOA violated CC&Rs § 3.1(a) and Architectural Committee regulation 3(D) by permitting members to construct play structures (swingsets, treehouses, etc.) on properties that already contained one detached structure (garage or shed), arguing that the rules allowed only one detached structure of any type.

Orders: Petitioner's petition is denied because he failed to establish that CC&R § 3.1 prohibits play structures under any circumstances. All play structures that the Architectural Committee has previously approved are allowed to remain, and the Architectural Committee may consider and grant future Play Structure Approval Requests.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Analytics Highlights

Topics: HOA governance, CC&R interpretation, detached structures, play structures, Architectural Committee regulations, burden of proof
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Audio Overview

Decision Documents

18F-H1817006-REL Decision – 604710.pdf

Uploaded 2025-10-08T07:03:18 (155.4 KB)





Briefing Doc – 18F-H1817006-REL


Briefing Document: Mandela v. Blue Ridge Estates Homeowner Association (No. 18F-H1817006-REL)

Executive Summary

This document synthesizes the findings of an Administrative Law Judge (ALJ) decision regarding a dispute between a homeowner, Charles Mandela (“Petitioner”), and the Blue Ridge Estates Homeowner Association (“Respondent”). The core issue was whether the HOA violated its Covenants, Conditions, and Restrictions (CC&Rs) by permitting homeowners to install play structures (e.g., swing sets, treehouses) on lots that already contained another detached structure, such as a garage or shed.

The Petitioner argued that the HOA had historically enforced a strict “one detached structure” rule and that its recent allowance of play structures constituted a violation of CC&R § 3.1. In contrast, the Respondent contended that the underlying intent of the CC&Rs was to prevent secondary residential dwellings, not to prohibit recreational structures consistent with a family-oriented community. The HOA asserted it had properly amended its Architectural Committee regulations, not the CC&Rs, to clarify this distinction.

The ALJ ruled decisively in favor of the Respondent HOA. The central finding was that the intent of the restrictive covenant was to maintain the single-family residential character of the community. Because play structures cannot be easily converted into secondary residences, they are not inconsistent with this intent. The ALJ concluded that the HOA was not required to amend the CC&Rs (which requires a 75% member vote) but acted within its authority to amend its rules and regulations via a simple board vote. The Petitioner’s petition was denied.

Case Overview

• Case Number: 18F-H1817006-REL

• Parties:

◦ Petitioner: Charles Mandela

◦ Respondent: Blue Ridge Estates Homeowner Association

• Hearing Date: November 28, 2017

• Presiding Judge: Administrative Law Judge Diane Mihalsky

• Core Allegation: The Petitioner alleged that the Respondent HOA violated CC&R § 3.1(a) and Architectural Committee Aligned Standard 3(D) by allowing members to build play structures, swing sets, or treehouses on properties that already had another detached structure like a garage or shed.

Central Arguments and Presented Evidence

Petitioner’s Position (Charles Mandela)

The Petitioner’s case was built on the premise of a long-standing, strict interpretation of the “one detached structure” rule.

• Core Argument: For 18 years, the Respondent interpreted CC&R § 3.1 to permit only one detached structure on any given lot, regardless of its type.

• Evidence and Testimony:

◦ Historical Enforcement: Testified that between 2002 and 2016, the HOA enforced this rule by removing nine non-compliant structures, including a gazebo, a playhouse, an observation deck, and a zipline structure.

◦ 2006 Legal Opinion: Submitted a February 7, 2006, letter from the law firm Carpenter Hazlewood, PLC, which opined on the ambiguity of CC&R § 3.1. The letter stated, “It still appears that only one structure (garage or shed) is permitted,” and supported the HOA’s ability to “enforce the ‘one detached structure’ requirement.” The letter did not specifically mention play structures.

◦ Invalid Approval Form: Presented a “Play Structure Approval Request” form he had drafted while on the board. This form incorrectly stated that the Board of Directors had voted on June 25, 2016, “to adopt changes to the CCR’s [sic], which will allow play structures.” Petitioner argued this was invalid because changing the CC&Rs requires a 75% vote of the membership, which was not obtained.

◦ Ancillary Documents: Submitted documents related to a housing discrimination claim filed by the HOA’s current president, Joseph Hancock, and a letter concerning another member. Petitioner testified these matters involved play structures, though the documents themselves did not mention CC&R § 3.1.

Respondent’s Position (Blue Ridge Estates HOA)

The Respondent’s defense centered on the purpose of the CC&Rs and its authority as a board to clarify and amend its own rules and regulations.

• Core Argument: The HOA did not violate the CC&Rs because the intent of the relevant articles is to prohibit secondary residential dwellings, not recreational structures suitable for a community intended to be a “uniquely planned recreation property.”

• Evidence and Testimony:

◦ Community Status: There are currently 16 swingsets or play structures within the 193-lot development. The HOA president, Joseph Hancock, testified he has a swingset used by his children, grandchildren, and neighbors.

◦ Legal Counsel: The HOA retained the firm of Poli & Ball, PLC, which opined that because the community is for recreation and family use, “[p]lay structures are perfectly consistent with recreation and family use.” The firm advised that the Architectural Committee’s regulations could be changed to reflect this without amending the CC&Rs. Another law firm, Carpenter Hazlewood, generally agreed with this opinion.

◦ Correction of Clerical Error: Mr. Hancock testified that the form submitted by the Petitioner contained a typographical error. The board’s intent in its June 25, 2016, vote was to amend the Architectural Committee’s regulations, not the CC&Rs.

◦ Board Meeting Minutes: The HOA submitted minutes from board meetings in December 2016 and October 2017. These minutes document the board’s discovery of the error on the website form and subsequent votes to formally clarify that the change was to the rules and regulations, not the CC&Rs, thereby ratifying its decision.

◦ Amended Approval Form: Respondent submitted the corrected “Play Structure Approval Request” form, which states, “Per the modified Rules and Regulations dated April 6, 2016, this form must be submitted to Architectural Committee for approval of any Play Structure.”

Governing Rules and Covenants

The dispute hinged on the interpretation and interplay of several key provisions in the community’s governing documents.

Document / Section

Key Provision

CC&R § 3.1

“No building or structure shall be erected or maintained separate from the Single Family Residence located on any Lot, other than a garage… No garage or shed shall be built prior to the issuance of a Coconino County building permit for the construction of a Single Family Residence.”

Architectural Regulation 3(D)

“One detached structure may, with Architectural Committee approval, be constructed on a property. The residence must be constructed and completed before the detached structure is built.”

CC&R § 4.2

“By a majority vote of the Board, the Association may, from time to time… adopt, amend and repeal rules and regulations to be known as the ‘Rules and Regulations.’”

CC&R § 12.2

Amending the Declaration of CC&Rs requires “the affirmative vote… or written consent of Members owning at least seventy-five percent (75%) of all Lots.”

Administrative Law Judge’s Findings and Legal Rationale

The ALJ found that the Petitioner failed to meet his burden of proof and that the Respondent acted properly within its authority.

• Intent of the Covenant: The Judge determined that CC&R Article III is fundamentally “concerned with keeping Respondent single-family residential by prohibiting structures and vehicles that could be used as a second residential dwelling on a lot.” This interpretation is supported by other rules in the article prohibiting mobile homes and clarifying that “If you can live/sleep in it, you cannot park it” in the development.

• Status of Play Structures: The decision concludes that a play structure “cannot be easily converted into a second residence.” Therefore, permitting a play structure in addition to a garage or shed is not inconsistent with the primary purpose of CC&R § 3.1.

• Board Authority vs. Member Vote: Because allowing play structures was not inconsistent with the CC&Rs, the Respondent was not required to amend the CC&Rs through a 75% member vote. Instead, the Board was empowered by CC&R § 4.2 to “amend the Architectural Committee’s regulations to provide clarification on the status of play structures” through a majority vote of the Board.

• History of Enforcement: The Judge found that the Petitioner failed to establish a uniform history of enforcement against play structures. Rather, “it appears that the status of play structures, swingsets, and tree houses has been unsettled and the subject of some contention,” partly due to the Petitioner’s own advocacy.

• Conclusion: The Respondent properly resolved the ambiguity by amending its regulations.

Final Order and Implications

• Decision: The petition was denied because the Petitioner did not establish that CC&R § 3.1 prohibits play structures under any circumstances.

• Outcome for the Community:

1. The HOA’s amendment of its rules to explicitly permit play structures was deemed valid.

2. All play structures previously approved by the Architectural Committee are allowed to remain on members’ properties.

3. The Architectural Committee is authorized to consider and approve future Play Structure Approval Requests that are submitted in accordance with the established regulations.


Charles Mandela vs. Blue Ridge Estates Homeowner Association

Posted on by

Case Summary

Case ID 18F-H1817006-REL
Agency ADRE
Tribunal OAH
Decision Date 2017-12-06
Administrative Law Judge Diane Mihalsky
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Charles Mandela Counsel —
Respondent Blue Ridge Estates Homeowner Association Counsel Brian C. Axt, Esq.

Alleged Violations

CC&Rs § 3.1(a); Architectural Committee Aligned Standard 3(D)

Outcome Summary

The Administrative Law Judge denied the homeowner's petition, finding that the HOA did not violate its CC&Rs by allowing play structures on properties that already contained a detached garage or shed, because play structures are not easily convertible into a second residence, which was the underlying concern of the relevant CC&R section.

Why this result: Petitioner failed to establish by a preponderance of the evidence that Respondent violated CC&R § 3.1. The ALJ determined that the HOA correctly clarified the status of play structures through an amendment to the Architectural Committee's regulations.

Key Issues & Findings

Alleged violation of CC&Rs § 3.1(a) and Architectural Committee regulation 3(D) regarding allowing play structures (swing sets, treehouses) when another detached structure (garage or shed) is present.

Petitioner alleged that the Respondent HOA violated CC&Rs § 3.1(a) and Architectural Committee regulation 3(D) by permitting members to construct play structures (swingsets, treehouses, etc.) on properties that already contained one detached structure (garage or shed), arguing that the rules allowed only one detached structure of any type.

Orders: Petitioner's petition is denied because he failed to establish that CC&R § 3.1 prohibits play structures under any circumstances. All play structures that the Architectural Committee has previously approved are allowed to remain, and the Architectural Committee may consider and grant future Play Structure Approval Requests.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Analytics Highlights

Topics: HOA governance, CC&R interpretation, detached structures, play structures, Architectural Committee regulations, burden of proof
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Audio Overview

Decision Documents

18F-H1817006-REL Decision – 604710.pdf

Uploaded 2025-10-09T03:32:05 (155.4 KB)





Briefing Doc – 18F-H1817006-REL


Briefing Document: Mandela v. Blue Ridge Estates Homeowner Association (No. 18F-H1817006-REL)

Executive Summary

This document synthesizes the findings of an Administrative Law Judge (ALJ) decision regarding a dispute between a homeowner, Charles Mandela (“Petitioner”), and the Blue Ridge Estates Homeowner Association (“Respondent”). The core issue was whether the HOA violated its Covenants, Conditions, and Restrictions (CC&Rs) by permitting homeowners to install play structures (e.g., swing sets, treehouses) on lots that already contained another detached structure, such as a garage or shed.

The Petitioner argued that the HOA had historically enforced a strict “one detached structure” rule and that its recent allowance of play structures constituted a violation of CC&R § 3.1. In contrast, the Respondent contended that the underlying intent of the CC&Rs was to prevent secondary residential dwellings, not to prohibit recreational structures consistent with a family-oriented community. The HOA asserted it had properly amended its Architectural Committee regulations, not the CC&Rs, to clarify this distinction.

The ALJ ruled decisively in favor of the Respondent HOA. The central finding was that the intent of the restrictive covenant was to maintain the single-family residential character of the community. Because play structures cannot be easily converted into secondary residences, they are not inconsistent with this intent. The ALJ concluded that the HOA was not required to amend the CC&Rs (which requires a 75% member vote) but acted within its authority to amend its rules and regulations via a simple board vote. The Petitioner’s petition was denied.

Case Overview

• Case Number: 18F-H1817006-REL

• Parties:

◦ Petitioner: Charles Mandela

◦ Respondent: Blue Ridge Estates Homeowner Association

• Hearing Date: November 28, 2017

• Presiding Judge: Administrative Law Judge Diane Mihalsky

• Core Allegation: The Petitioner alleged that the Respondent HOA violated CC&R § 3.1(a) and Architectural Committee Aligned Standard 3(D) by allowing members to build play structures, swing sets, or treehouses on properties that already had another detached structure like a garage or shed.

Central Arguments and Presented Evidence

Petitioner’s Position (Charles Mandela)

The Petitioner’s case was built on the premise of a long-standing, strict interpretation of the “one detached structure” rule.

• Core Argument: For 18 years, the Respondent interpreted CC&R § 3.1 to permit only one detached structure on any given lot, regardless of its type.

• Evidence and Testimony:

◦ Historical Enforcement: Testified that between 2002 and 2016, the HOA enforced this rule by removing nine non-compliant structures, including a gazebo, a playhouse, an observation deck, and a zipline structure.

◦ 2006 Legal Opinion: Submitted a February 7, 2006, letter from the law firm Carpenter Hazlewood, PLC, which opined on the ambiguity of CC&R § 3.1. The letter stated, “It still appears that only one structure (garage or shed) is permitted,” and supported the HOA’s ability to “enforce the ‘one detached structure’ requirement.” The letter did not specifically mention play structures.

◦ Invalid Approval Form: Presented a “Play Structure Approval Request” form he had drafted while on the board. This form incorrectly stated that the Board of Directors had voted on June 25, 2016, “to adopt changes to the CCR’s [sic], which will allow play structures.” Petitioner argued this was invalid because changing the CC&Rs requires a 75% vote of the membership, which was not obtained.

◦ Ancillary Documents: Submitted documents related to a housing discrimination claim filed by the HOA’s current president, Joseph Hancock, and a letter concerning another member. Petitioner testified these matters involved play structures, though the documents themselves did not mention CC&R § 3.1.

Respondent’s Position (Blue Ridge Estates HOA)

The Respondent’s defense centered on the purpose of the CC&Rs and its authority as a board to clarify and amend its own rules and regulations.

• Core Argument: The HOA did not violate the CC&Rs because the intent of the relevant articles is to prohibit secondary residential dwellings, not recreational structures suitable for a community intended to be a “uniquely planned recreation property.”

• Evidence and Testimony:

◦ Community Status: There are currently 16 swingsets or play structures within the 193-lot development. The HOA president, Joseph Hancock, testified he has a swingset used by his children, grandchildren, and neighbors.

◦ Legal Counsel: The HOA retained the firm of Poli & Ball, PLC, which opined that because the community is for recreation and family use, “[p]lay structures are perfectly consistent with recreation and family use.” The firm advised that the Architectural Committee’s regulations could be changed to reflect this without amending the CC&Rs. Another law firm, Carpenter Hazlewood, generally agreed with this opinion.

◦ Correction of Clerical Error: Mr. Hancock testified that the form submitted by the Petitioner contained a typographical error. The board’s intent in its June 25, 2016, vote was to amend the Architectural Committee’s regulations, not the CC&Rs.

◦ Board Meeting Minutes: The HOA submitted minutes from board meetings in December 2016 and October 2017. These minutes document the board’s discovery of the error on the website form and subsequent votes to formally clarify that the change was to the rules and regulations, not the CC&Rs, thereby ratifying its decision.

◦ Amended Approval Form: Respondent submitted the corrected “Play Structure Approval Request” form, which states, “Per the modified Rules and Regulations dated April 6, 2016, this form must be submitted to Architectural Committee for approval of any Play Structure.”

Governing Rules and Covenants

The dispute hinged on the interpretation and interplay of several key provisions in the community’s governing documents.

Document / Section

Key Provision

CC&R § 3.1

“No building or structure shall be erected or maintained separate from the Single Family Residence located on any Lot, other than a garage… No garage or shed shall be built prior to the issuance of a Coconino County building permit for the construction of a Single Family Residence.”

Architectural Regulation 3(D)

“One detached structure may, with Architectural Committee approval, be constructed on a property. The residence must be constructed and completed before the detached structure is built.”

CC&R § 4.2

“By a majority vote of the Board, the Association may, from time to time… adopt, amend and repeal rules and regulations to be known as the ‘Rules and Regulations.’”

CC&R § 12.2

Amending the Declaration of CC&Rs requires “the affirmative vote… or written consent of Members owning at least seventy-five percent (75%) of all Lots.”

Administrative Law Judge’s Findings and Legal Rationale

The ALJ found that the Petitioner failed to meet his burden of proof and that the Respondent acted properly within its authority.

• Intent of the Covenant: The Judge determined that CC&R Article III is fundamentally “concerned with keeping Respondent single-family residential by prohibiting structures and vehicles that could be used as a second residential dwelling on a lot.” This interpretation is supported by other rules in the article prohibiting mobile homes and clarifying that “If you can live/sleep in it, you cannot park it” in the development.

• Status of Play Structures: The decision concludes that a play structure “cannot be easily converted into a second residence.” Therefore, permitting a play structure in addition to a garage or shed is not inconsistent with the primary purpose of CC&R § 3.1.

• Board Authority vs. Member Vote: Because allowing play structures was not inconsistent with the CC&Rs, the Respondent was not required to amend the CC&Rs through a 75% member vote. Instead, the Board was empowered by CC&R § 4.2 to “amend the Architectural Committee’s regulations to provide clarification on the status of play structures” through a majority vote of the Board.

• History of Enforcement: The Judge found that the Petitioner failed to establish a uniform history of enforcement against play structures. Rather, “it appears that the status of play structures, swingsets, and tree houses has been unsettled and the subject of some contention,” partly due to the Petitioner’s own advocacy.

• Conclusion: The Respondent properly resolved the ambiguity by amending its regulations.

Final Order and Implications

• Decision: The petition was denied because the Petitioner did not establish that CC&R § 3.1 prohibits play structures under any circumstances.

• Outcome for the Community:

1. The HOA’s amendment of its rules to explicitly permit play structures was deemed valid.

2. All play structures previously approved by the Architectural Committee are allowed to remain on members’ properties.

3. The Architectural Committee is authorized to consider and approve future Play Structure Approval Requests that are submitted in accordance with the established regulations.


James and Shawna Larson vs. Tempe Gardens Townhouse Corporation

Posted on by

Case Summary

Case ID 17F-H1717038-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-12-11
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner James and Shawna Larson Counsel Lisa M. Hanger
Respondent Tempe Gardens Townhouse Corporation Counsel Nathan Tennyson

Alleged Violations

A.R.S. § 33-1255(C); CC&R sections 9 and 9(b)

Outcome Summary

The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).

Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.

Key Issues & Findings

Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.

Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).

Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1255(C)
  • CC&R section 9
  • CC&R section 9(b)
  • A.R.S. § 33-1212(4)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov

Analytics Highlights

Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:

  • A.R.S. § 33-1255(C)
  • CC&R section 9
  • CC&R section 9(b)
  • A.R.S. § 33-1212(4)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.09
  • ARIZ. ADMIN. CODE § R2-19-119
  • Gutierrez v. Industrial Commission of Arizona

Audio Overview

Decision Documents

17F-H1717038-REL Decision – 583987.pdf

Uploaded 2025-10-08T06:51:36 (53.0 KB)

17F-H1717038-REL Decision – 585505.pdf

Uploaded 2025-10-08T06:51:37 (385.9 KB)





Briefing Doc – 17F-H1717038-REL


Briefing on Larson v. Tempe Gardens Townhouse Corporation

Executive Summary

This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.

The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.

In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.

Procedural History and Jurisdictional Rulings

Initial Petition and Dismissal Recommendation

On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.

Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.

This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:

• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”

• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.

• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.

• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.

Rejection of Dismissal and Re-Hearing

On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”

• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.

• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”

• This question was deemed sufficient to make the matter “ripe for adjudication.”

• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.

Analysis of the Merits of the Dispute

The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.

Respondent’s (HOA) Case

The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:

• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”

• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.

◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).

◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.

◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.

◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.

Petitioners’ (Larsons’) Case

The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.

• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.

• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:

◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.

◦ A second bid quoted $5,975 to remove and then replace the structure.

• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.

• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.

Final Administrative Law Judge Decision

On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.

Key Findings and Conclusions of Law

Finding/Conclusion

Details

Standard of Review

The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.

Reasonableness of HOA Action

Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.

HOA Authority

CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”

Patio Cover Classification

The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).

Cost Responsibility

The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”

Final Order

Based on these findings, the Administrative Law Judge ordered the following:

“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”

The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.


James and Shawna Larson vs. Tempe Gardens Townhouse Corporation

Posted on by

Case Summary

Case ID 17F-H1717038-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-12-11
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner James and Shawna Larson Counsel Lisa M. Hanger
Respondent Tempe Gardens Townhouse Corporation Counsel Nathan Tennyson

Alleged Violations

A.R.S. § 33-1255(C); CC&R sections 9 and 9(b)

Outcome Summary

The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).

Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.

Key Issues & Findings

Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.

Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).

Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1255(C)
  • CC&R section 9
  • CC&R section 9(b)
  • A.R.S. § 33-1212(4)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov

Analytics Highlights

Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:

  • A.R.S. § 33-1255(C)
  • CC&R section 9
  • CC&R section 9(b)
  • A.R.S. § 33-1212(4)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.09
  • ARIZ. ADMIN. CODE § R2-19-119
  • Gutierrez v. Industrial Commission of Arizona

Audio Overview

Decision Documents

17F-H1717038-REL Decision – 583987.pdf

Uploaded 2025-10-08T06:58:14 (53.0 KB)

17F-H1717038-REL Decision – 585505.pdf

Uploaded 2025-10-08T06:58:15 (385.9 KB)





Briefing Doc – 17F-H1717038-REL


Briefing on Larson v. Tempe Gardens Townhouse Corporation

Executive Summary

This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.

The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.

In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.

Procedural History and Jurisdictional Rulings

Initial Petition and Dismissal Recommendation

On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.

Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.

This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:

• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”

• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.

• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.

• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.

Rejection of Dismissal and Re-Hearing

On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”

• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.

• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”

• This question was deemed sufficient to make the matter “ripe for adjudication.”

• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.

Analysis of the Merits of the Dispute

The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.

Respondent’s (HOA) Case

The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:

• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”

• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.

◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).

◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.

◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.

◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.

Petitioners’ (Larsons’) Case

The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.

• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.

• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:

◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.

◦ A second bid quoted $5,975 to remove and then replace the structure.

• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.

• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.

Final Administrative Law Judge Decision

On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.

Key Findings and Conclusions of Law

Finding/Conclusion

Details

Standard of Review

The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.

Reasonableness of HOA Action

Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.

HOA Authority

CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”

Patio Cover Classification

The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).

Cost Responsibility

The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”

Final Order

Based on these findings, the Administrative Law Judge ordered the following:

“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”

The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.


James and Shawna Larson vs. Tempe Gardens Townhouse Corporation

Posted on by

Case Summary

Case ID 17F-H1717038-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-12-11
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner James and Shawna Larson Counsel Lisa M. Hanger
Respondent Tempe Gardens Townhouse Corporation Counsel Nathan Tennyson

Alleged Violations

A.R.S. § 33-1255(C); CC&R sections 9 and 9(b)

Outcome Summary

The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).

Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.

Key Issues & Findings

Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.

Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).

Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1255(C)
  • CC&R section 9
  • CC&R section 9(b)
  • A.R.S. § 33-1212(4)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov

Analytics Highlights

Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:

  • A.R.S. § 33-1255(C)
  • CC&R section 9
  • CC&R section 9(b)
  • A.R.S. § 33-1212(4)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.09
  • ARIZ. ADMIN. CODE § R2-19-119
  • Gutierrez v. Industrial Commission of Arizona

Audio Overview

Decision Documents

17F-H1717038-REL Decision – 583987.pdf

Uploaded 2025-10-08T07:02:29 (53.0 KB)

17F-H1717038-REL Decision – 585505.pdf

Uploaded 2025-10-08T07:02:30 (385.9 KB)





Briefing Doc – 17F-H1717038-REL


Briefing on Larson v. Tempe Gardens Townhouse Corporation

Executive Summary

This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.

The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.

In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.

Procedural History and Jurisdictional Rulings

Initial Petition and Dismissal Recommendation

On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.

Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.

This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:

• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”

• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.

• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.

• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.

Rejection of Dismissal and Re-Hearing

On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”

• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.

• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”

• This question was deemed sufficient to make the matter “ripe for adjudication.”

• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.

Analysis of the Merits of the Dispute

The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.

Respondent’s (HOA) Case

The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:

• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”

• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.

◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).

◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.

◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.

◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.

Petitioners’ (Larsons’) Case

The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.

• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.

• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:

◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.

◦ A second bid quoted $5,975 to remove and then replace the structure.

• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.

• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.

Final Administrative Law Judge Decision

On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.

Key Findings and Conclusions of Law

Finding/Conclusion

Details

Standard of Review

The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.

Reasonableness of HOA Action

Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.

HOA Authority

CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”

Patio Cover Classification

The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).

Cost Responsibility

The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”

Final Order

Based on these findings, the Administrative Law Judge ordered the following:

“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”

The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.


James and Shawna Larson vs. Tempe Gardens Townhouse Corporation

Posted on by

Case Summary

Case ID 17F-H1717038-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-12-11
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner James and Shawna Larson Counsel Lisa M. Hanger
Respondent Tempe Gardens Townhouse Corporation Counsel Nathan Tennyson

Alleged Violations

A.R.S. § 33-1255(C); CC&R sections 9 and 9(b)

Outcome Summary

The ALJ dismissed the petition, ruling that the HOA acted reasonably and had the authority under the CC&Rs to require the removal of the homeowner's patio cover for necessary painting and repairs. The ALJ determined that because the patio cover is a limited common element, the Petitioners must bear the cost of removal and reinstallation according to A.R.S. § 33-1255(C).

Why this result: Petitioners failed to prove the HOA violated CC&Rs or acted unreasonably, and statutory law assigned the expense burden for the limited common element to the homeowner.

Key Issues & Findings

Authority of HOA to mandate removal of homeowner's patio cover for maintenance and assignment of removal/reinstallation costs.

Petitioners challenged the Respondent HOA's authority and reasonableness in requiring them to remove their patio cover, a limited common element, for building painting and repair, and disputed the requirement that Petitioners bear the costs. The ALJ concluded that the HOA's plan was reasonable, the HOA had the authority under CC&R sections 9 and 9(b), and Petitioners must bear the cost of removal and reinstallation under A.R.S. § 33-1255(C).

Orders: Petitioners’ petition is dismissed. Respondent is deemed the prevailing party. Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1255(C)
  • CC&R section 9
  • CC&R section 9(b)
  • A.R.S. § 33-1212(4)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov

Analytics Highlights

Topics: HOA authority, limited common element, maintenance costs, patio cover, CC&Rs, statutory interpretation, dismissal, prevailing party
Additional Citations:

  • A.R.S. § 33-1255(C)
  • CC&R section 9
  • CC&R section 9(b)
  • A.R.S. § 33-1212(4)
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.09
  • ARIZ. ADMIN. CODE § R2-19-119
  • Gutierrez v. Industrial Commission of Arizona

Audio Overview

Decision Documents

17F-H1717038-REL Decision – 583987.pdf

Uploaded 2025-10-09T03:31:46 (53.0 KB)

17F-H1717038-REL Decision – 585505.pdf

Uploaded 2025-10-09T03:31:46 (385.9 KB)





Briefing Doc – 17F-H1717038-REL


Briefing on Larson v. Tempe Gardens Townhouse Corporation

Executive Summary

This briefing synthesizes the legal dispute between homeowners James and Shawna Larson and the Tempe Gardens Townhouse Corporation (the “Respondent” or “HOA”). The core conflict centered on the HOA’s directive that the Larsons remove their wooden patio cover at their own expense to facilitate a community-wide building repair and painting project.

The case progressed through two distinct phases. Initially, an Administrative Law Judge (ALJ) recommended dismissing the Larsons’ petition for a lack of a “justiciable controversy,” reasoning that the HOA had not yet acted on its threat to remove the patio cover, rendering the dispute speculative. However, the Commissioner of the Department of Real Estate rejected this recommendation, finding the matter was “ripe for adjudication,” and ordered a full hearing on the merits.

In the final decision, a second ALJ dismissed the Larsons’ petition and ruled in favor of the HOA. The judge found the HOA’s plan to be reasonable and necessary for the proper and safe completion of the project, based on credible testimony from the project manager. The decision affirmed the HOA’s authority under its CC&Rs to require the removal of the structure. Crucially, the ruling established that the patio cover is a “limited common element” under Arizona law. Consequently, pursuant to Arizona Revised Statutes, the homeowners (the Larsons) are exclusively responsible for all costs associated with it, including its removal and potential reinstallation.

Procedural History and Jurisdictional Rulings

Initial Petition and Dismissal Recommendation

On June 16, 2017, James and Shawna Larson filed a petition with the Department of Real Estate against their HOA, alleging a violation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). However, the initial filing did not specify which provisions had been violated.

Upon inquiry, the Petitioners’ counsel admitted via email that no specific provision of the CC&Rs had yet been violated. Instead, their concern was that section 10(a) would be violated if the HOA acted on its threat to forcibly remove their patio cover and charge them for the cost.

This led to the “ORDER RECOMMENDING DISMISSAL FOR LACK OF JUSTICIABLE CONTROVERSY,” issued on August 25, 2017, by Administrative Law Judge Suzanne Marwil. The key findings of this order were:

• Speculative Harm: The Judge found that the HOA’s actions “have not yet been undertaken and our [are] speculative at this juncture.”

• Lack of Jurisdiction: The order stated that the Office of Administrative Hearings’ jurisdiction, per A.R.S. § 32-2199, is limited to adjudicating existing violations of community documents, not potential future ones.

• Misunderstanding by Both Parties: The order noted, “Both parties fundamentally misunderstand the limits of this Tribunal’s jurisdiction.” The Petitioners were seeking a ruling on a future action, while the Respondent was urging the Tribunal to find the Petitioners had violated the CC&Rs, which was not the subject of the petition.

• Recommended Forum: The Judge suggested that the appropriate forum for the Petitioners would be a declaratory judgment action in superior court.

Rejection of Dismissal and Re-Hearing

On August 31, 2017, Judy Lowe, the Commissioner of the Department of Real Estate, issued an “ORDER REJECTING RECOMMENDATION OF DISMISSAL.”

• The Commissioner rejected the ALJ’s finding that the matter lacked a justiciable controversy.

• The order cited a letter from the Respondent dated June 1, 2017, which posed the question: “Is the presence of the awning a violation of the Association’s governing documents?”

• This question was deemed sufficient to make the matter “ripe for adjudication.”

• The Commissioner requested that the hearing be rescheduled for a ruling on the matter. A re-hearing was subsequently conducted on November 20, 2017, before Administrative Law Judge Thomas Shedden.

Analysis of the Merits of the Dispute

The re-hearing focused on the substantive conflict: whether the HOA had the authority to compel the Larsons to remove their patio cover at their own expense for the maintenance project.

Respondent’s (HOA) Case

The HOA, consisting of 169 units, initiated a project to make necessary repairs to its twenty-five buildings and then have them painted. The HOA’s position was based on the following points:

• Legal Authority: The HOA asserted its authority under sections 9 and 9(b) of its CC&Rs, which state that the HOA is responsible for maintaining building exteriors and that “Any cooperative action necessary or appropriate to the proper maintenance and upkeep of the… [building] exteriors… shall be taken by the [Respondent].”

• Project Necessity: The project manager, Wayne King, provided testimony that the HOA’s board deemed credible and reasonable.

◦ Safety: King stated that all five bidding contractors required the patio covers to be removed to ensure a safe work environment as mandated by the Arizona Department of Occupational Safety and Health (OSHA).

◦ Logistics: Standard scaffolding would not fit without removing the covers, commercial scaffolding would not provide full access, a forklift was not viable due to overhead power lines, and allowing painters to walk on homeowner patio covers was unsafe.

◦ Quality of Work: The project involved sanding, power washing, and patching before painting to “do the job right.” Many covers had been improperly flashed, causing damage to the buildings that needed repair.

◦ Warranty: The paint company would not provide a warranty for the project if individual homeowners, such as the Larsons, were permitted to paint their own units.

Petitioners’ (Larsons’) Case

The Larsons, who purchased their unit in 1999 with the wooden patio cover already in place, contested the HOA’s demands.

• Challenge to Authority: The Petitioners argued that the HOA had no legal authority to demand the removal of their patio cover.

• Unreasonable Cost: They asserted that the cost of removal and reinstallation was unreasonable, submitting two bids:

◦ One bid quoted $1,250 to remove and dispose of the cover and $3,980 to remove and rebuild it with new wood.

◦ A second bid quoted $5,975 to remove and then replace the structure.

• Proposed Alternative: In a letter dated May 19, 2017, the Larsons offered to have the back of their unit painted at their own expense.

• Compromise Offer: During the November 20, 2017 hearing, after hearing the project manager’s testimony, Ms. Larson offered that they would agree not to reinstall the patio cover if the HOA would pay for its removal.

Final Administrative Law Judge Decision

On December 11, 2017, ALJ Thomas Shedden issued a final decision dismissing the Larsons’ petition and finding in favor of the Respondent, Tempe Gardens Townhouse Corporation.

Key Findings and Conclusions of Law

Finding/Conclusion

Details

Standard of Review

The HOA’s decisions regarding maintenance and repair are given deference, provided they act reasonably.

Reasonableness of HOA Action

Based on the “credible testimony” of Wayne King, the Judge found that the HOA’s proposed plan for repairing and painting the buildings, which required the removal of patio covers, was reasonable.

HOA Authority

CC&R sections 9 and 9(b) were found to be “sufficient to show that Respondent has the authority to remove Petitioners’ patio to complete the painting work.”

Patio Cover Classification

The Petitioners’ patio cover was legally classified as a “limited common element” within the meaning of ARIZ. REV. STAT. section 33-1212(4).

Cost Responsibility

The central issue of payment was decided by statute. The Judge concluded that under a “reasonable reading of ARIZ. REV. STAT. section 33-1255(C),” any common expense associated with a limited common element “shall be assessed exclusively against the units benefitted.”

Final Order

Based on these findings, the Administrative Law Judge ordered the following:

“The evidence of record supports a conclusion that Respondent has authority to require Petitioners to remove their patio cover to allow the building to be properly and safely painted, and that Petitioners are responsible for the cost to remove the patio cover and the cost to reinstall it should they choose to do so.”

The final order was that the Petitioners’ petition be dismissed, and the Respondent, Tempe Gardens Townhouse Corporation, was deemed the prevailing party.


Brian Sopatk vs. The Lakeshore Village Condo. Assoc., Inc.

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Case Summary

Case ID 17F-H1716004-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2017-08-10
Administrative Law Judge Thomas Shedden
Outcome none
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian Sopatyk Counsel Nathan Andrews, Esq. and Jill Kennedy, Esq.
Respondent The Lakeshore Village Condo. Association, Inc. Counsel Bradley R. Jardine, Esq.

Alleged Violations

ARIZ. REV. STAT. section 33-1260

Outcome Summary

The Administrative Law Judge dismissed the petition because the Petitioner failed to prove the HOA violated A.R.S. § 33-1260. The contested $660 fee was determined to be a working capital contribution authorized by the Association's CC&Rs (section 8.13), which is distinct from the resale disclosure fees limited by statute.

Why this result: The Petitioner did not meet the burden of proof to show a statutory violation because the fee in question was a valid working capital fee collected under the CC&Rs, not an illegal transfer fee under A.R.S. § 33-1260.

Key Issues & Findings

Alleged violation of statutory maximum fee for resale disclosure/transfer documents.

Petitioner alleged the Association charged a $660 transfer fee, plus a $30 statement fee, violating A.R.S. § 33-1260, which limits aggregate fees for resale disclosure and transfer services to $400. The ALJ found the $660 fee was a working capital fee authorized by CC&R section 8.13, not a statutory disclosure fee, despite being mislabeled by the Association.

Orders: Petitioner Brian D. Sopatyk's petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119

Analytics Highlights

Topics: HOA fees, transfer fee, working capital fund, statutory compliance, burden of proof, condominium association, resale disclosure
Additional Citations:

  • ARIZ. REV. STAT. section 33-1260
  • ARIZ. REV. STAT. § 32-2199.01
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 33-1242(A)(2)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • A.R.S. § 41-1092.08
  • A.R.S. § 41-1092.09
  • A.R.S. § 1-243

Audio Overview

Decision Documents

17f-H1716004-REL Decision – 531040.pdf

Uploaded 2025-10-08T06:51:51 (67.9 KB)

17f-H1716004-REL Decision – 540004.pdf

Uploaded 2025-10-08T06:51:51 (154.0 KB)





Briefing Doc – 17f-H1716004-REL


Briefing Document: Sopatyk v. The Lakeshore Village Condominium Association, Inc.

Executive Summary

This document synthesizes the legal proceedings and outcomes of the case Brian Sopatyk v. The Lakeshore Village Condominium Association, Inc. (Case No. 17F-H1716004-REL), adjudicated by the Arizona Office of Administrative Hearings. The core of the dispute was Petitioner Brian Sopatyk’s allegation that the Respondent Condominium Association violated Arizona Revised Statute (A.R.S.) § 33-1260 by charging a $660 “transfer fee” upon the sale of a condominium unit, which exceeded the statutory maximum of $400 for resale disclosure services.

The Association’s defense centered on the argument that the $660 charge was not a disclosure fee but a separate “working capital fee” authorized by its Covenants, Conditions, and Restrictions (CC&Rs). The Association contended that this fee had been erroneously mislabeled as a “transfer fee” due to a clerical error inherited by its current manager. The actual statutory fee for disclosure documents, the Association argued, was a separate $30 charge paid by the seller.

After an initial hearing in November 2016 and a subsequent re-hearing in June 2017, the Administrative Law Judge consistently found that Mr. Sopatyk failed to prove the alleged violation by a preponderance of the evidence. The court concluded that the evidence supported the Association’s claim of a mislabeled working capital fee. Consequently, Mr. Sopatyk’s petition was dismissed on both occasions, and the Association was deemed the prevailing party.

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Case Overview

Parties and Jurisdiction

Representation

Petitioner

Brian Sopatyk

On his own behalf (Initial Hearing); Nathan Andrews, Esq. & Jill Kennedy, Esq. (Re-Hearing)

Respondent

The Lakeshore Village Condominium Association, Inc.

Bradley R. Jardine, Esq. (Both Hearings)

Jurisdiction

Arizona Department of Real Estate (ADRE)

Authority under A.R.S. Title 32, Ch. 20, Art. 11.

Adjudicator

Administrative Law Judge (ALJ) Thomas Shedden

Office of Administrative Hearings, Phoenix, AZ

Core Allegation and Governing Statute

• Allegation: Brian Sopatyk alleged that The Lakeshore Village Condominium Association violated A.R.S. § 33-1260 by charging fees exceeding the statutory maximum for resale disclosure services. Specifically, a $660 fee labeled as a “transfer fee” was charged when he purchased his unit.

• Petitioner’s Request: Mr. Sopatyk sought an order for the Association to comply with the statute, issue refunds to all who paid fees in excess of the maximum, and for a civil penalty to be imposed.

• Governing Statute: A.R.S. § 33-1260 stipulates that a condominium association “may charge the unit owner a fee of no more than an aggregate of four hundred dollars to compensate the association for the costs incurred in the preparation of a statement or other documents furnished… for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of the property.” The statute explicitly forbids charging any other fees for these services except as authorized.

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Chronology of Legal Proceedings

March 2, 2015

The Association issues a “Disclosure Form” for Mr. Sopatyk’s purchase, listing a $660 transfer fee and a $30 statement fee.

May 18, 2016

The Association’s Board of Directors meets to address Mr. Sopatyk’s claim. They conclude the $660 fee was a mislabeled working capital fee and direct corrective accounting.

August 9, 2016

Mr. Sopatyk files a petition with the Arizona Department of Real Estate.

November 14, 2016

The initial hearing is conducted before ALJ Thomas Shedden.

November 29, 2016

ALJ Shedden issues a decision dismissing Mr. Sopatyk’s petition.

December 13, 2016

The ADRE Commissioner, Judy Lowe, adopts the ALJ’s decision, issuing a Final Order dismissing the case.

February 7, 2017

A Notice of Re-Hearing is issued after Mr. Sopatyk requests one.

June 9, 2017

A re-hearing is conducted before ALJ Thomas Shedden.

June 26, 2017

ALJ Shedden issues a new decision, again dismissing Mr. Sopatyk’s petition.

August 1, 2017

The deadline passes for the ADRE to accept, reject, or modify the ALJ’s re-hearing decision. No action is taken.

August 10, 2017

The Office of Administrative Hearings certifies the ALJ’s decision from the re-hearing as the final administrative decision in the matter.

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Analysis of Arguments and Evidence

Petitioner’s Position (Brian Sopatyk)

• Primary Argument: The Association’s own documents, specifically the Disclosure Form and the HUD-1 settlement statement, explicitly labeled the $660 charge as a “Transfer Fee.” This amount is a prima facie violation of the $400 statutory cap in A.R.S. § 33-1260.

• Evidence Presented:

◦ March 2, 2015 Disclosure Form: Showed a required payment of a $660 “transfer fee” and a $30 “statement fee.”

◦ HUD-1 Settlement Statement: Documented that the $660 Transfer Fee was paid to the Association, with $330 paid from the Borrower’s (Sopatyk’s) funds and $330 from the Seller’s funds. It also showed the Seller paid a separate $30 Resale Statement Fee.

• Contradictory Testimony: In his sworn petition, Mr. Sopatyk stated the $660 fee was “split between the seller and the buyer.” However, during the re-hearing, he testified that he had “in fact paid the entire $660 as part of the negotiated price of the unit.” The ALJ noted this discrepancy, stating “either Mr. Sopatyk’s sworn statement or his testimony must be false.”

Respondent’s Position (The Lakeshore Village Condo. Association)

• Primary Argument: The $660 fee was not for resale disclosure services but was a working capital fee authorized by the Association’s CC&Rs. The “transfer fee” label was a historical clerical error that the Board had since identified and corrected.

• Evidence and Testimony:

◦ CC&R Section 8.13 (“Transfer Fee and Working Capital Fund”): This provision authorizes the Association to assess each new owner a fee of “at least twice the average monthly assessment” to be deposited into the working capital fund (referred to as the Reserve Fund). The monthly assessment was $328.83, making the $660 fee consistent with this rule.

◦ Testimony of Amy Telnes (Association Manager): Ms. Telnes testified that when she became manager, she was incorrectly informed that the working capital fee was the transfer fee. She affirmed that the $660 fee was deposited into the Association’s reserve fund and that the separate $30 fee was the one charged pursuant to A.R.S. § 33-1260.

◦ May 18, 2016 Board Meeting Minutes: These minutes, entered into evidence, documented the Board’s conclusion that it was collecting a working capital contribution but “erroneously calling it a transfer fee.” The Board directed Ms. Telnes to perform an accounting and transfer all such fees collected after October 1, 2013, to the Reserve Account. The minutes also show the Board voted to change its fee structure moving forward to a single $400 fee to avoid future confusion.

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Judicial Findings and Final Disposition

Standard and Burden of Proof

Across both hearings, the ALJ established that the standard of proof was a preponderance of the evidence, defined as evidence with “the most convincing force” that is “sufficient to incline a fair and impartial mind to one side of the issue rather than the other.” The burden of proof rested entirely on the petitioner, Mr. Sopatyk, to demonstrate that a violation had occurred.

Initial Hearing Decision (November 29, 2016)

• Findings of Fact: The ALJ found that the Association was charging a $660 working capital fee in accordance with its CC&Rs but had been mislabeling it. It was also charging a separate $30 document preparation fee.

• Conclusion of Law: Mr. Sopatyk did not show by a preponderance of the evidence that the Association violated A.R.S. § 33-1260.

• Order: The petition was dismissed, and the decision was adopted as final by the ADRE Commissioner on December 13, 2016.

Re-Hearing Decision (June 26, 2017)

• Findings of Fact: The re-hearing produced more detailed findings but led to the same conclusion. The ALJ found that the Association had authority under its CC&Rs to collect the $660 working capital fee and that the statutory disclosure statute did not apply to this charge. The fee applicable to the statute was the $30 charge paid by the seller.

• Conclusion of Law: The ALJ reiterated that Mr. Sopatyk failed to meet his burden of proof. The Association’s argument that the claim should fail because Sopatyk did not personally pay over $400 was deemed “not persuasive,” as the statute applies to all violations regardless of particularized harm.

• Order: The petition was again ordered to be dismissed.

Final Administrative Disposition

The ADRE took no action to modify or reject the ALJ’s re-hearing decision by the statutory deadline of August 1, 2017. As a result, the Office of Administrative Hearings certified the June 26, 2017 decision as the final administrative decision on August 10, 2017, concluding the matter in favor of the Respondent Association.