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The unfounded fears about Office of Administrative Hearings (OAH), complaints by disgruntled homeowners that resulted in the Legislature imposing a $550 filing fee, raised to $2,000 five months later and then lowered for a single case back to $550 in April, have been proven just that — completely unfounded. The results after the first year reveal:
HOA cases: 38
Decisions: 32
Homeowners won: 10
HOAs won: 14
Split decisions: 4
Vacated decisions: 4
The homeowners won not 5 percent of the cases, as would be expected if the wild claims that “95 percent of the HOAs are good,” as alleged by HOA attorneys and lobbyists over the years were indeed true, but 42 percent of the cases. The first year statistics revealed that in most cases the homeowners were representing themselves facing an HOA attorney, and that all cases were filed by homeowners and not one by an HOA. Bear in mind that the decisions are based on the adhesion contract nature of the HOA governing documents, the general lack of legal knowledge by the homeowner petitioner, and the HOA supportive state laws — all serving to create a “playing field” that is not level.
The miniscule number of HOA cases that were filed, in contrast to some 7,360 cases heard by OAH in 2006 (that’s a mere 1.7 percent), does not warrant the imposition of a $550 or $2,000 fee. The Legislature must remove this requirement that treats homeowners in HOAs as second-class citizens. Research into OAH fees for agency filings shows that over 78 percent paid no fee whatsoever.
It is time for legislators to recognize that they have been mislead over the years by the lobbyists who seek to treat HOAs as independent principalities free from government oversight. A review of the audiotapes of the OAH hearings provides a wealth of information regarding HOA attorney courtroom tactics against the homeowners representing themselves, and the hostile and arrogant attitude of HOAs toward obeying state laws and the HOA governing documents. The audiotapes reveal HOA attorneys more concerned about winning, adopting a strong adversarial position supporting the actions of the HOA board regardless of the clearly stated laws or provisions of the governing documents to the contrary. The tapes are invaluable aids for homeowners who want to understand the law and for HOA boards interested in following the law. Listening to the tapes should result in a better understanding of life in an HOA.
Some areas of concern stand out from a review of these tapes. One case reveals the HOA president wanting “someone to tell us we were violating the law” when the CC&Rs were amended to appropriate the lot owner’s sidewalks as part of the HOA common area, since the HOA was already maintaining them. Where was the deed of transference required by law≠ Where was the property owner’s signature on the deed≠ Where was the HOA attorney on this issue≠ And yet, HOAs are treated as special entities without being held accountable under the law, without training or proper guidance on the law by their attorneys.
At this writing, two other cases won by the homeowner petitioner resulted in decisions requiring either the HOA to act or holding prior HOA actions to be in violation of the law. The HOAs have not heeded the decisions and orders. How can the homeowner enforce these decisions≠ He must go to Superior Court and file for contempt of court.
Toward the end of this year, the JLBC is to review the fees charged for filing an HOA complaint with the Department of Fire, Building and Life Safety, the agency charged under H2824 (Ariz. Sess. L. Ch 324, 2006) to receive HOA complaints (they are then sent to OAH for adjudication). In February of this year, the director of the agency raised the fees to $2,000 in spite of the November 2006 JLBC decision to keep the fees as is until more data could be provided regarding costs. Justification for the increase dealt with the length of time to analyze cases due to multiple complaints against the HOA, and the large paper filings. While some cases involved large number of exhibits by homeowners (over 30), the fact remains that the HOA attorneys were filing 20-page memorandums to help the administrative law judge understand the case.
Although the JLBC will meet again later this year to decide the fee structure, it is obvious that homeowners are being unjustly penalized in their attempt to obtain justice against abusive HOA boards. All cases were filed by homeowners who had to pay an upfront fee, while the HOA attorneys had a role in causing these cases to be unnecessarily drawn out and raising the cost of the OAH process. The Legislature must abolish the fees.
In spite of a few learning curves by homeowners and OAH, the adjudication of homeowner complaints has been a success. While the adoption of OAH was a milestone in due process reforms for HOAs, there are more reforms necessary to restore the rights and freedoms of homeowners living in HOAs as enjoyed by homeowners not living in HOAs.
George Staropoli is a homeowner rights activist and president of Citizens for Constitutional Local Government, Inc.

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