Homeowner Petitions Against An Association ¹

By Cliff J. Vanell

Note: OAH is committed to fairness and making hearings accessible to all. This article is part of a series of informational articles to educate the public and parties who appear before us about the hearing process and how to better present their cases. The following article may be found at OAH’s website at www.azoah.com along with all previous articles published in the OAH Newsletter.

Overview

In Laws 2006, Chapter 324, the Arizona Legislature created a revolutionary system of adjudication of disputes between homeowners ² and their associations as an alternative to filing an action in court. Filing a petition with the Department of Fire, Building and Life Safety, the means by which such a matter is brought before the Office of Administrative Hearings (OAH), is a less costly and faster method of resolving disputes. Harnessing the advantages of streamlined procedures and a fast track which has proven itself since January 1996, disputes are resolved at OAH in generally less than 90 days. The OAH Administrative Law Judges have a great deal of leeway to consider evidence and to craft pre-hearing orders so as to maximize efficiency. However, there are costs to the process, some apparent, others less so.

There is an immediate cost to the homeowner in the nature of a filing fee.³ Defending even a non-meritorious petition can be costly for an association, and the expense is ultimately borne by the association members, including the homeowner, through assessments. A homeowner will be reimbursed the filing fee by the association only if the homeowner is determined by the Administrative Law Judge to be the prevailing party. The homeowner therefore has an immediate interest in filing a valid petition, and one that can be proven. An unsubstantiated or invalid petition will result in the loss of the filing fee. Likewise, the association has an economic interest in evaluating the homeowner's petition to determine to what extent the alleged facts are really in dispute and whether the allegations have merit. What follows is offered in the way of a checklist to guide both homeowner and association.

Homeowner

1. Do I have a valid petition?

• Am I alleging a violation of a statute in Title 33 or the community documents?
  Only disputes that allege a violation of the provisions of A.R.S. Title 33 Chapter 9 (condominium associations) or Chapter 16 (planned community associations), or the provisions of the condominium or planned community documents can be heard by the OAH. For example, if the association is required to provide 24 hours notice of a Board meeting according to the association governing documents, and held a meeting without doing so, one would have a valid petition. Allegations of criminal acts, libel, slander, etc. which constitute violations of the criminal statutes of Title 13, or which constitute civil torts are not within the jurisdiction of the OAH.

• Is the violation by the association?
  The petition must deal with a dispute between a homeowner and a condominium or planned community association. Disputes between two homeowners or with an individual board member of an association cannot be heard by the OAH.

• Is it your dispute?
  A homeowner has no standing to pursue a dispute on behalf of another homeowner. For example, if another homeowner is aggrieved by the denial of an architectural modification in violation of the association guidelines, only the aggrieved homeowner may bring a petition against the association.

• Is it a current dispute?
  There must be a current dispute. For example, if board meetings were held without notice but the practice has now been conformed to notice requirements and prior actions taken in violation of the notice requirements subsequently ratified, there may have been a technical violation of the association's governing documents, but it is no longer in dispute. Another way to look at it is to ask yourself whether a remedy can be fashioned by the Administrative Law Judge? If there is no remedy, or the situation has already been remedied, it is probably not a current dispute.

• Has the dispute been previously adjudicated?

If the petition item has been decided by a court or previously has been addressed in a hearing before the OAH, it cannot be revisited. OAH has no authority for contempt proceedings or enforcement of prior decisions. However, failure by a party to comply with a decision issued by the OAH may result in the other party seeking enforcement of the Administrative Law Judge's decision through a contempt of court proceeding in Superior Court

The homeowner bears the burden of proving the allegations of the petition. Therefore, it is incumbent on the homeowner to have evidence to substantiate each allegation in the petition. Alleging counts that were not proven at hearing will be taken into account when determining whether the homeowner was the prevailing party and is entitled to reimbursement of the filing fee. Limiting the petition to strong allegations with good evidence maximizes the chances of having the filing fee reimbursed.

3. Are my expectations realistic about what I can accomplish?

The availability of the OAH hearing process ideally should result in compliance with statutes and association documents without the need to file a petition. The possibility of civil penalties together with the relative ease of bringing an action can provide motivation for an association to take the necessary action to comply with the applicable statutes and/or governing documents.

On the other hand, the Administrative Law Judge has no power to undo the passage of time or undo hurt feelings. The Administrative Law Judge cannot order damages or restitution. Civil penalties are reserved for situations where it can be demonstrated that an association has acted punitively or in bad faith.

Association