ALJDEC decisions subject to certification as final

12F-H1213010-BFS-rhg · Department of Fire Building and Life Safety - H/C · 2014-01-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 20, 2013, at 8:00 a.m. The record was held open to allow the parties sufficient time to prepare and submit legal memoranda. APPEARANCES: Denise Park (hereinafter “Petitioner”) was represented by her attorney, J. Roger Wood, Esq., J. Roger Wood PLLC. Montezuma Fairway Villas Homeowners Association (hereinafter “Montezuma”) was represented by its attorney, Jonathon V. O’Steen, Esq., O’Steen & Harrison, PLC. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and legal memorandums submitted by both parties. On rehearing, Petitioner asserts that the rehearing testimony shed no new light on any of the previous Findings of Fact and Conclusions of Law. Petitioner asserts that the March 15, 2013 Order should remain undisturbed and in full effect. On rehearing, Montezuma asserts that that Montezuma did not violate the provisions of A.R.S. § 33- 1250. Montezuma asserts that since only three members of Montezuma were present, no election was required. Montezuma asserts that there was no violation of A.R.S. § 33-1258 because the applicable one-year statute of limitations had expired. Montezuma asserts that Montezuma’s failure to maintain the common area for Montezuma was not a violation of A.R.S. § 33- 1247 because Petitioner had failed to pay her homeowner’s dues for over two years and Montezuma was unable to pay for the maintenance of the common areas without Petitioner’s dues. After review of the record for the both the original hearing and the rehearing, the following Findings of Fact, Conclusions of Law and Recommended Order on Rehearing are made:

FINDINGS OF FACT

The Department of Fire, Building and Life Safety (the “Department”) is authorized by statute to receive Petitions for Hearing from members of condominium associations and from condominium associations in Arizona. Montezuma is a condominium association consisting of seventeen condominium units located in Lake Montezuma, Arizona. Petitioner owns three condominium units in and is a member of Montezuma. Petitioner filed a Petition with the Department alleging that Montezuma had violated the provisions of A.R.S. §§ 33-1247, 33-1248, 33-1250, and 33- 1805. Petitioner specifically alleged that: a) Montezuma failed to maintain the common areas of Montezuma as required by A.R.S. § 33-1247. b) Montezuma failed to conduct open meetings as required by A.R.S. § 33-1248. c) Montezuma failed to hold proper elections as required by A.R.S. § 33-1250. d) Montezuma failed to provide financial information as required by A.R.S. § 33-1258.

Respondent’s Answer to the Petition alleged, in part, as follows: a) Petitioner was delinquent in paying her association dues to Montezuma. b) Petitioner was mailed written notice of an association meeting that was held on May 24, 2012, but Petitioner failed to attend to the scheduled meeting or to inform Montezuma of any issues that she wanted to have addressed. c) Although the former association president had failed to call a meeting for several years, very few people ever attended any of the meetings. d) Montezuma had been unable to perform some cosmetic maintenance work because Petitioner and two other members had failed to pay their association dues.

Petitioner’s Testimony[1] Petitioner testified that she purchased her first condominium unit in Montezuma during 2003. Petitioner stated that she purchased two additional condominium units in 2011. Petitioner testified that she utilizes all three condominium units as rental properties. Petitioner testified that that she filed the Petition against Montezuma because Montezuma failed to provide maintenance for the common areas of Montezuma. Petitioner stated that the lack of maintenance caused her to become concerned about the financial status of Montezuma and to request financial records from Montezuma. Petitioner testified that only two family-sized trash containers are provided for the seventeen condominium units located in Montezuma. Petitioner stated that the two family-sized trash containers are constantly overflowing and that the weeds “are high” in the common areas. Petitioner acknowledged that Montezuma had performed some maintenance on the front of the condominium building. Petitioner testified that the rear of the condominium building required proper maintenance and painting. Petitioner stated that there was a broken wall in the common area that had been damaged since 2003. Petitioner testified that Montezuma had refused to provide her with the requested financial records until she filed the petition at issue. Petitioner acknowledged that Montezuma has provided the financial records that she requested. Petitioner stated that she requested that Montezuma furnish financial records in August 2011. Petitioner testified that she requested the information to “see where the money was going.” Petitioner stated that Montezuma was not maintaining the common areas at that time. Petitioner testified that in November 2012, she learned that there had been an association meeting on May 24, 2012. Petitioner stated that she received no notice of the association meeting. Petitioner testified that Montezuma had her email address and that she would have attended the association meeting had she received notice of the association meeting. Petitioner acknowledged that she had utilized several different mailing addresses. Petitioner testified that she had provided Montezuma with her current address in one of her emails to Montezuma. Petitioner acknowledged that Montezuma had provided additional trash containers for the units after the March 28, 2013 hearing. Petitioner testified that she had received copies of the minutes for the May 24, 2012 association meeting. Petitioner stated that there was no election of association officers during the May 24, 2012 association meeting. Petitioner testified that there has not been an election of association officers during the time that she has been a member of Montezuma. Petitioner testified that she did not trust the members of the board of Montezuma. Petitioner stated that she filed the petition at issue because there had been no elections and Montezuma had failed to provide requested financial information. Petitioner acknowledged that she received the requested financial information in January or February 2012. Petitioner testified that the only notice of an annual meeting from Montezuma that she received was in 2004. Petitioner stated that she had received no other notices of annual meetings from Montezuma. Carol Ann Klagge’s Testimony[2] Carol Ann Klagge (hereinafter “Ms. Klagge”) testified that she is the treasurer for Montezuma. Ms. Klagge stated that she has been the treasurer for Montezuma for over ten years. Ms. Klagge testified that Montezuma is a small condominium association with seventeen units. Ms. Klagge stated that she owns three condominium units in Montezuma. Ms. Klagge testified that six owners of condominium units reside in the State of Arizona. Ms. Klagge testified that the other owners of condominium units live out-of-state. Ms. Klagge stated that most of the condominium units are utilized as rental units. Ms. Klagge testified that Petitioner had provided Montezuma with several different addresses.[3] Ms. Klagge stated that she mailed written notice of the May 24, 2012 association meeting to Petitioner. Ms. Klagge testified that the written notice was not returned to Montezuma as being undeliverable. Ms. Klagge testified that she and her husband, Jay Klagge (hereinafter “Mr. Klagge”), and Tony Sturgeon (hereinafter “Mr. Sturgeon”) were the only three association members who attended the May 24, 2012 association meeting. Ms. Klagge stated that according to Montezuma’s Bylaws, only members in good standing can participate in voting during the association meeting. Ms. Klagge testified that association dues are assessed according to the size of the condominium units, with larger units being assessed at a higher amount of dues than smaller units. Ms. Klagge testified that she provided financial statements for Montezuma to all members who attended the May 24, 2012 association meeting. Ms. Klagge stated that she informed Petitioner in a previous email that she would be providing a financial statement for Montezuma to all members who attended the May 24, 2012 association meeting. Ms. Klagge testified that Petitioner did not request that the financial statement be provided to her prior to the May 24, 2012 association meeting. Ms. Klagge stated that Petitioner did not attend the May 24, 2012 association meeting. Ms. Klagge acknowledged that there was not an election of association officers during the May 24, 2012 association meeting. Ms. Klagge testified that there was no election because only three members were in attendance at the meeting. Ms. Klagge stated that all three attending members were already officers of Montezuma and that the three members agreed to continue in their current capacity. Ms. Klagge stated that Mr. Klagge was the secretary for Montezuma and Mr. Sturgeon was the vice-president for Montezuma. Ms. Klagge testified that they did not want to vote for themselves and that there appeared to be no purpose to have a vote when only three members were present and all three present members were willing to continue in their capacity as officers of the association. Ms. Klagge stated that the president of Montezuma had previously resigned and that the position of president had not been filled. Ms. Klagge testified that she offered the position of president of Montezuma to Petitioner. Ms. Klagge stated that Petitioner declined the position. Ms. Klagge testified that it was hard to get anyone to help out and that the association needed help. Ms. Klagge testified that Montezuma provides a common sewer line and septic tank, trash service, outside maintenance, and insurance for the exterior of the condominiums. Ms. Klagge stated that Montezuma had previously provided for the maintenance of the landscaping for the condominiums, the water for the landscaping, and nighttime exterior security lighting. Ms. Klagge testified that Montezuma was struggling financially and cutbacks in expenditures had to be made. Ms. Klagge testified that Montezuma used to have two large multi-family sized trash dumpsters. Ms. Klagge stated that Montezuma did not have the need or money to provide two large multi-family sized dumpsters. Ms. Klagge testified that the broken wall had been hit by a car. Ms. Klagge stated that Montezuma had not repaired the damaged wall because Montezuma could not afford to repair the wall. Ms. Klagge stated that the broken wall was still functional as a wall. Ms. Klagge testified that after the March 28, 2013 hearing on this matter, Montezuma corrected the damaged wall, performed necessary painting work, and provided additional trash dumpsters for the tenants of Montezuma. Ms. Klagge stated that Montezuma was able to perform the remedial actions because Petitioner paid the dues for her three condominium units to Montezuma. Ms. Klagge testified that Montezuma had paid over $7,000.00 for sewer repairs over the last twelve months. Ms. Klagge stated that Montezuma had very limited financial resources. Ms. Klagge acknowledged that Montezuma had increased its assessments by $25.00 per lot for 2013. Ms. Klagge acknowledged that Montezuma did have the power to impose a special assessment if necessary. Ms. Klagge testified that there would be no need for a special assessment if all of the unit owners paid their dues. Ms. Klagge acknowledged that the notice of the meeting did not contain the word “annual” and that it did not mention “elections” as a purpose for the meeting. Ms. Klagge stated that there was no nomination of officers and no election of officers at the May 24, 2012 meeting. Ms. Klagge testified that only three people were present for the May 24, 2012 meeting. Ms. Klagge acknowledged that the three people present could have conducted a formal election of officers but decided not to. Ms. Klagge stated that Montezuma could not get members to become officers of Montezuma. Ms. Klagge testified that Montezuma repeatedly tried to get members to run for election and that no one was willing to run for election. Helen Bartels’ Testimony[4] Helen Bartels (hereinafter “Ms. Bartels”) testified that she owns a condominium unit in Montezuma. Ms. Bartels stated that she used her condominium unit as rental property. Ms. Bartels testified that she received written notice of the May 24, 2012 meeting. Ms. Bartels stated that she did not attend the May 24, 2012 meeting. Ms. Bartels testified that she received an annual financial statement from Montezuma. Ms. Bartels testified that she became a member of the board for Montezuma after the March 28, 2013 hearing. Ms. Bartels stated that the condominium owners in Montezuma would be hard-pressed to pay a special assessment. Ms. Bartels testified that if sufficient money was available, the common areas should be maintained.

PROVISIONS OF LAW REFERENCED AT HEARING

1. A.R.S. § 12-541 provides as follows: There shall be commenced and prosecuted within one year after the cause of action accrues, and not afterward, the following actions: . . . .

5. Upon a liability created by statute, other than a penalty or forfeiture.

2. A.R.S. § 33-1243(J) provides, in relevant part, as follows: Unless any provision in the condominium documents requires an annual audit by a certified public accountant, the board of directors shall provide for an annual financial audit, review or compilation of the association. The audit, review or compilation shall be completed no later than one hundred eighty days after the end of the association's fiscal year and shall be made available upon request to the unit owners within thirty days after its completion.

3. A.R.S. § 33-1247 provides as follows: A. Except to the extent provided by the declaration, subsection C of this section or section 33-1253, subsection B, the association is responsible for maintenance, repair and replacement of the common elements and each unit owner is responsible for maintenance, repair and replacement of the unit. On reasonable notice, each unit owner shall afford to the association and the other unit owners, and to their agents or employees, access through the unit reasonably necessary for those purposes. If damage is inflicted on the common elements or any unit through which access is taken, the unit owner responsible for the damage, or the association if it is responsible, is liable for the prompt repair of the damage.

B. For any residential rental units that have been declared a slum property by the city or town pursuant to section 33-1905 and that are in the condominium complex, the association is responsible for enforcing any requirement for a licensed property management firm that is imposed by a city or town pursuant to section 33-1906.

C. In addition to the liability borne by the declarant as a unit owner under this chapter, the declarant alone is liable for the maintenance, repair and replacement of any portion of the common elements which the declarant reserves the right to withdraw from the condominium, as long as the unit owner maintains that right.

4. A.R.S. § 33-1248 provides as follows: A. Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the unit owners' association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association or any person designated by a member in writing as the member's representative and all members or designated representatives so desiring shall be permitted to attend and speak at an appropriate time during the deliberations and proceedings. The board may place reasonable time restrictions on those persons speaking during the meeting but shall permit a member or a member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item in addition to any other opportunities to speak. The board shall provide for a reasonable number of persons to speak on each side of an issue. Persons attending may audiotape or videotape those portions of the meetings of the board of directors and meetings of the members that are open. The board of directors of the association may adopt reasonable rules governing the audiotaping or videotaping of open portions of the meetings of the board and the membership, but such rules shall not preclude such audiotaping or videotaping by those attending. Any portion of a meeting may be closed only if that portion of the meeting is limited to consideration of one or more of the following:

1. Legal advice from an attorney for the board or the association. On final resolution of any matter for which the board received legal advice or that concerned pending or contemplated litigation, the board may disclose information about that matter in an open meeting except for matters that are required to remain confidential by the terms of a settlement agreement or judgment.

2. Pending or contemplated litigation.

3. Personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association.

4. Matters relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association.

5. Discussion of a unit owner's appeal of any violation cited or penalty imposed by the association except on request of the affected unit owner that the meeting be held in an open session.

B. Notwithstanding any provision in the condominium documents, all meetings of the unit owners' association and the board shall be held in this state. A meeting of the unit owners' association shall be held at least once each year. Special meetings of the unit owners' association may be called by the president, by a majority of the board of directors or by unit owners having at least twenty-five per cent, or any lower percentage specified in the bylaws, of the votes in the association. Not fewer than ten nor more than fifty days in advance of any meeting of the unit owners, the secretary shall cause notice to be hand delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit owner. The notice of any meeting of the unit owners shall state the time and place of the meeting. The notice of any special meeting of the unit owners shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws, any changes in assessments that require approval of the unit owners and any proposal to remove a director or officer. The failure of any unit owner to receive actual notice of a meeting of the unit owners does not affect the validity of any action taken at that meeting.

C. Notwithstanding any provision in the declaration, bylaws or other condominium documents, for meetings of the board of directors that are held after the termination of declarant control of the association, notice to unit owners of meetings of the board of directors shall be given at least forty-eight hours in advance of the meeting by newsletter, conspicuous posting or any other reasonable means as determined by the board of directors. An affidavit of notice by an officer of the association is prima facie evidence that notice was given as prescribed by this section. Notice to unit owners of meetings of the board of directors is not required if emergency circumstances require action by the board before notice can be given. Any notice of a board meeting shall state the time and place of the meeting. The failure of any unit owner to receive actual notice of a meeting of the board of directors does not affect the validity of any action taken at that meeting.

D. Notwithstanding any provision in the declaration, bylaws or other condominium documents, for meetings of the board of directors that are held after the termination of declarant control of the association, all of the following apply:

1. The agenda shall be available to all unit owners attending.

2. An emergency meeting of the board of directors may be called to discuss business or take action that cannot be delayed until the next regularly scheduled board meeting. The minutes of the emergency meeting shall state the reason necessitating the emergency meeting. The minutes of the emergency meeting shall be read and approved at the next regularly scheduled meeting of the board of directors.

3. A quorum of the board of directors may meet by means of a telephone conference if a speakerphone is available in the meeting room that allows board members and unit owners to hear all parties who are speaking during the meeting.

4. Any quorum of the board of directors that meets informally to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board votes or takes any action on any matter at that informal meeting.

E. It is the policy of this state as reflected in this section that all meetings of a condominium, whether meetings of the unit owners' association or meetings of the board of directors of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the unit owners of the matters to be discussed or decided and to ensure that unit owners have the ability to speak after discussion of agenda items, but before a vote of the board of directors is taken. Toward this end, any person or entity that is charged with the interpretation of these provisions shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings.

F. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

5. A.R.S. § 33-1250 provides as follows: A. If only one of the multiple owners of a unit is present at a meeting of the association, the owner is entitled to cast all the votes allocated to that unit. If more than one of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the multiple owners unless the declaration expressly provides otherwise. There is majority agreement if any one of the multiple owners casts the votes allocated to that unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.

B. During the period of declarant control, votes allocated to a unit may be cast pursuant to a proxy duly executed by a unit owner. If a unit is owned by more than one person, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy. A unit owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association. A proxy is void if it is not dated or purports to be revocable without notice. The proxy is revoked on presentation of a later dated proxy executed by the same unit owner. A proxy terminates one year after its date, unless it specifies a shorter term or unless it states that it is coupled with an interest and is irrevocable.

C. Notwithstanding any provision in the condominium documents, after termination of the period of declarant control, votes allocated to a unit may not be cast pursuant to a proxy. The association shall provide for votes to be cast in person and by absentee ballot and may provide for voting by some other form of delivery. Notwithstanding section 10-3708 or the provisions of the condominium documents, any action taken at an annual, regular or special meeting of the members shall comply with all of the following if absentee ballots are used:

1. The absentee ballot shall set forth each proposed action.

2. The absentee ballot shall provide an opportunity to vote for or against each proposed action.

3. The absentee ballot is valid for only one specified election or meeting of the members and expires automatically after the completion of the election or meeting.

4. The absentee ballot specifies the time and date by which the ballot must be delivered to the board of directors in order to be counted, which shall be at least seven days after the date that the board delivers the unvoted absentee ballot to the member.

5. The absentee ballot does not authorize another person to cast votes on behalf of the member.

D. Votes cast by absentee ballot or other form of delivery are valid for the purpose of establishing a quorum.

E. Notwithstanding subsection C of this section, an association for a timeshare plan as defined in section 32-2197 may permit votes by a proxy that is duly executed by a unit owner.

F. If the declaration requires that votes on specified matters affecting the condominium be cast by lessees rather than unit owners of leased units all of the following apply:

1. The provisions of subsections A and B of this section apply to lessees as if they were unit owners.

2. Unit owners who have leased their units to other persons shall not cast votes on those specified matters.

3. Lessees are entitled to notice of meetings, access to records and other rights respecting those matters as if they were unit owners. Unit owners shall also be given notice, in the manner prescribed in section 33-1248, of all meetings at which lessees may be entitled to vote.

G. Unless the declaration provides otherwise, votes allocated to a unit owned by the association shall not be cast.

H. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

I. For the purposes of this section, "period of declarant control" means the time during which the declarant or persons designated by the declarant may elect or appoint the members of the board of directors pursuant to the condominium documents or by virtue of superior voting power.

6. A.R.S. § 33-1258 provides as follows: A. Except as provided in subsection B of this section, all financial and other records of the association shall be made reasonably available for examination by any member or any person designated by the member in writing as the member's representative. The association shall not charge a member or any person designated by the member in writing for making material available for review. The association shall have ten business days to fulfill a request for examination. On request for purchase of copies of records by any member or any person designated by the member in writing as the member's representative, 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.

B. Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following:

1. Privileged communication between an attorney for the association and the association.

2. Pending litigation.

3. Meeting minutes or other records of a session of a board meeting that is not required to be open to all members pursuant to section 33-1248.

4. Personal, health or financial records of an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association.

5. Records relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association.

C. The association shall not be required to disclose financial and other records of the association if disclosure would violate any state or federal law.

D. This section does not apply to an association for a timeshare plan that is subject to chapter 20 of this title.

7. A.R.S. § 33-1260 provides as follows: A. For condominiums with fewer than fifty units, a unit owner shall mail or deliver to a purchaser or a purchaser's authorized agent within ten days after receipt of a written notice of a pending sale of the unit, and for condominiums with fifty or more units, the association shall mail or deliver to a purchaser or a purchaser's authorized agent within ten days after receipt of a written notice of a pending sale that contains the name and address of the purchaser, all of the following in either paper or electronic format:

1. A copy of the bylaws and the rules of the association.

2. A copy of the declaration.

3. A dated statement containing:

(a) The telephone number and address of a principal contact for the association, which may be an association manager, an association management company, an officer of the association or any other person designated by the board of directors.

(b) The amount of the common expense assessment for the unit and any unpaid common expense assessment, special assessment or other assessment, fee or charge currently due and payable from the selling unit owner. If the request is made by a lienholder, escrow agent, unit owner or person designated by a unit owner pursuant to section 33-1256, failure to provide the information pursuant to this subdivision within the time provided for in this subsection shall extinguish any lien for any unpaid assessment then due against that unit.

(d) The total amount of money held by the association as reserves.

(e) If the statement is being furnished by the association, a statement as to whether the records of the association reflect any alterations or improvements to the unit that violate the declaration. The association is not obligated to provide information regarding alterations or improvements that occurred more than six years before the proposed sale. Nothing in this subdivision relieves the seller of a unit from the obligation to disclose alterations or improvements to the unit that violate the declaration, nor precludes the association from taking action against the purchaser of a unit for violations that are apparent at the time of purchase and that are not reflected in the association's records.

(f) If the statement is being furnished by the unit owner, a statement as to whether the unit owner has any knowledge of any alterations or improvements to the unit that violate the declaration.

(g) A statement of case names and case numbers for pending litigation with respect to the unit filed by the association against the unit owner or filed by the unit owner against the association. The unit owner or the association shall not be required to disclose information concerning the pending litigation that would violate any applicable rule of attorney- client privilege under Arizona law.

(h) A statement that provides "I hereby acknowledge that the declaration, bylaws and rules of the association constitute a contract between the association and me (the purchaser). By signing this statement, I acknowledge that I have read and understand the association's contract with me (the purchaser). I also understand that as a matter of Arizona law, if I fail to pay my association assessments, the association may foreclose on my property." The statement shall also include a signature line for the purchaser and shall be returned to the association within fourteen calendar days.

4. A copy of the current operating budget of the association.

5. A copy of the most recent annual financial report of the association. If the report is more than ten pages, the association may provide a summary of the report in lieu of the entire report.

6. A copy of the most recent reserve study of the association, if any.

7. A statement summarizing any pending lawsuits, except those relating to the collection of assessments owed by unit owners other than the selling unit owner, in which the association is a named party, including the amount of any money claimed.

B. A purchaser or seller who is damaged by the failure of the unit owner or the association to disclose the information required by subsection A of this section may pursue all remedies at law or in equity against the unit owner or the association, whichever failed to comply with subsection A of this section, including the recovery of reasonable attorney fees.

C. The 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 by the association pursuant to this section for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of the property. In addition, the association may charge a rush fee of no more than one hundred dollars if the rush services are required to be performed within seventy-two hours after the request for rush services, and may charge a statement or other documents update fee of no more than fifty dollars if thirty days or more have passed since the date of the original disclosure statement or the date the documents were delivered. The association shall make available to any interested party the amount of any fee established from time to time by the association. If the aggregate fee for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of a property is less than four hundred dollars on January 1, 2010, the fee may increase at a rate of no more than twenty per cent per year based on the immediately preceding fiscal year's amount not to exceed the four hundred dollar aggregate fee. The association may charge the same fee without regard to whether the association is furnishing the statement or other documents in paper or electronic format.

D. The fees prescribed by this section shall be collected no earlier than at the close of escrow and may only be charged once to a unit owner for that transaction between the parties specified in the notice required pursuant to subsection A of this section. An association shall not charge or collect a fee relating to services for resale disclosure, lien estoppel and any other services related to the transfer or use of a property except as specifically authorized in this section. An association that charges or collects a fee in violation of this section is subject to a civil penalty of no more than one thousand two hundred dollars.

E. This section applies to a managing agent for an association that is acting on behalf of the association.

F. A sale in which a public report is issued pursuant to sections 32-2183 and 32-2197.02 or a sale pursuant to section 32-2181.02 is exempt from this section.

G. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

H. For the purposes of this section, unless the context otherwise requires, "unit owner" means the seller of the condominium unit title and excludes any real estate salesperson or real estate broker who is licensed under title 32, chapter 20 and who is acting as a salesperson or broker, any escrow agent who is licensed under title 6, chapter 7 and who is acting as an escrow agent and also excludes a trustee of a deed of trust who is selling the property in a trustee's sale pursuant to chapter 6.1 of this title.

8. A.R.S. § 33-1805 provides as follows: A. Except as provided in subsection B of this section, all financial and other records of the association shall be made reasonably available for examination by any member or any person designated by the member in writing as the member's representative. The association shall not charge a member or any person designated by the member in writing for making material available for review. The association shall have ten business days to fulfill a request for examination. On request for purchase of copies of records by any member or any person designated by the member in writing as the member's representative, 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.

B. Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following:

1. Privileged communication between an attorney for the association and the association.

2. Pending litigation.

3. Meeting minutes or other records of a session of a board meeting that is not required to be open to all members pursuant to section 33-1804.

C. The association shall not be required to disclose financial and other records of the association if disclosure would violate any state or federal law.

By-Laws cited during hearing 9. Section 3: Annual Meetings[5] The general agenda of the meeting, convened and conducted by the President, is as follows: a. Call to Order. b. Reading of the Minutes of the previous meeting. c. Reading of the Treasurer’s Report. d. Reading of the President’s Report. e. Old Business. f. New Business. g. Election of Officers. h. Adjournment. 10. Section 5: Elections and Officers[6] The Offices of the Association include President, Vice President, Treasurer and Secretary. These offices are subject to the following guidelines: a. Only members can nominate candidates to these offices. b. Only members can vote for candidates for these offices. c. Only duly elected members can hold these offices. d. A member can only hold one office at any given time. e. Officers must be elected by a majority vote (at least 51% of the lots represented by eligible voters) present at the meeting by presence or proxy. f. Elections can only take place during formally announced meeting[s] of the Association.

CONCLUSIONS OF LAW

A.R.S. § 41-2198.01 permits an owner or a condominium association to file a petition with the Department for a hearing concerning violations of planned community documents or violations of statutes that regulate planned communities. That statute provides that such petitions will be heard before the Office of Administrative Hearings. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issue in this matter is by a preponderance of the evidence. See A.A.C. R2- 19-119. Proof by “preponderance of the evidence” means that it is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). Credible testimony and evidence established that the common areas of Montezuma contained a broken wall that required correction, weeds, inadequately sized overflowing trash containers, and peeling paint on the exterior of the condominiums. This Tribunal concludes that Montezuma failed to maintain the common areas of the association in violation of the charged provision of A.R.S. § 33-1247. The fact that Montezuma has now repaired the wall and provided additional trash containers does not alter the fact that Petitioner prevailed on this issue at the March 28, 2013 hearing. Credible testimony and evidence established that Montezuma conducted an annual meeting on May 24, 2012. Notice of the meeting was mailed to Complainant in accordance with applicable statute. Petitioner failed to attend the May 24, 2012 meeting. This Tribunal concludes that Petitioner failed to meet her burden of proving that Montezuma violated the charged provision of A.R.S. § 33-1248. Montezuma failed to hold proper elections as required by applicable statute. Montezuma failed to hold proper elections as required by the provisions of section five of Montezuma’s By-Laws. There was no dispute that there was no election. This Tribunal concludes that Montezuma violated the charged provision of A.R.S. § 33-1250. Credible testimony and evidence established that Petitioner requested financial information from Montezuma via email on August 12, 2011. Montezuma responded to Petitioner’s email but did not provide the requested financial information. There was no dispute that Montezuma provided Petitioner with the requested financial information prior to the administrative hearing in January or February, 2012. Petitioner sustained her burden of proving by a preponderance of the evidence that Montezuma failed to provide Petitioner with the requested financial reports within the ten (10) day period provided by A.R.S. § 32-1258. The Petition at issue was filed with the Department on or about November 14, 2012. A.R.S. § 12-541(5) provides a one-year statute of limitations. Petitioner did not file her petition with the Department within the one year period of time allowed by statute. This Tribunal concludes that the expiration of the one- year statue of limitations precludes finding that Montezuma violated the charged provision A.R.S. § 33-1258.

RECOMMENDed order on rehearing

In view of the foregoing, it is ORDERED that Petitioner be deemed the prevailing party in this matter for two (2) of the four (4) violations charged in her petition.[7] It is further ORDERED that Montezuma shall fully comply with the applicable provisions of A.R.S. § 33-1247, A.R.S. and § 33-1250 in the future. It is further ORDERED that Montezuma pay Petitioner One Thousand Dollars ($1,000.00), which constitutes one-half (1/2) of her filing fee of Two Thousand dollars ($2,000.00), to be paid to the Department in this matter within ninety (90) days of this Order. It is further ORDERED that Montezuma shall provide written proof to the Department within one hundred and eighty (180) days of this Order that (1) the weeds in the common areas have been eliminated or properly controlled. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of this Order will be five (5) days from the date of that certification. Done this day, January 2, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

Gene Palma, Director Department of Fire Building and Life Safety

----------------------- [1] 3/28/13 Hearing Record (hereinafter “H.R.”) at 18:45-1:25:45, and 11/20/13 Hearing Record (hereinafter “11/20/13 H.R.” at 1:11:46-1:35:46. [2] H.R. at 1:26:50-2:17:25, and 11/20/13 H.R. at 8:45-1:03.23. [3] See Exhibit R-4 (List of addresses for Petitioner). [4] H.R. at 2:17:25-2:21:40, and 11/20/13 H.R. at 1:04-1:11:16. [5] See Exhibit No. R-7 (By-Laws). [6] See Exhibit No. R-7 (By-Laws). [7] This Tribunal finds that all four alleged violations were of equal substance.

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