ALJDEC decisions subject to certification as final

21F-H2121032-REL · Department of Real Estate - H/C · 2021-04-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Carla J. Snyder,

Petitioner,

Las Hadas Villas Association,

Respondent.

No. 21F-H2121032-REL

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: April 1, 2021

APPEARANCES: Petitioner Carla J. Snyder appeared on her own behalf. David Potts, Esq. represented Respondent Las Hadas Villas Association. Ray Odom and Dr. John Gilderbloom appeared as witnesses for Petitioner Carla J. Snyder. Tonia Reynolds appeared as a witness for Respondent Las Hadas Villas Association.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

On or about February 22, 2021, Petitioner Carla J. Snyder filed a Homeowners Association (HOA) Dispute Process Petition (“Petition”) with the Arizona Department of Real Estate (“Department”) alleging a violation of community documents by Respondent Las Hadas Villas Association. Petitioner indicated a single issue would be presented, paid the appropriate $500.00 filing fee, and asserted a violation of Section 14.2 of the CC&Rs.

On or about February 22, 2021, the Department issued a Notice of Hearing in which it set forth the issue for hearing as follows:

The dispute between Petitioner and Respondent arises from Community Documents Covenants, Conditions and Restrictions (CCRs) 14.2. The Petitioner states, “There is a serious flaw in the construction of my roof (which was not built with flashing) and in the CC&Rs 14.2 it clearly states that it is the responsibility of the HOA to make the necessary repairs as well as being responsible for specific damage resulting from the roof construction, the impact of having an ill constructed roof has resulted in $11,476.00 in damages for which I had to incur the cost.”

At hearing, Petitioner presented the testimony of Ray Odom, a general contractor, and professor, Dr. John Gilderbloom, who is also Petitioner’s fiancé. Respondent presented the testimony of Property Manager Tonia Reynolds.

The relevant portions of the CC&Rs provide as follows:

14. Maintenance, Repairs and Replacements.

14.1. Owner’s Responsibility. Each Owner shall furnish and be responsible for, at his own expense, all of the maintenance, repairs and replacements within his own Unit, including all windows, doors and locks, interior partitioning, kitchen, bathroom and lighting fixtures, and all utility lines and air conditioning and heating units serving only such Owner’s Unit, and for the garage appurtenant to such Owner’s Unit, including the door thereof. Each Owner shall also be responsible for, at his own expense, the maintenance and repair of any exclusive use area which, as provided in Paragraph 10, is subject to the exclusive control, possession or use of the Owner, including, for example, balconies, patios, or fenced yard areas adjoining or appurtenant to the Unit. In the event of any dispute as to whether an Owner is responsible for the maintenance, repair or replacement of a particular area or item as provided in the Paragraph 14.1, the decision of the Board shall be conclusive.

14.2 Association’s Responsibility. Except as otherwise provided herein to the contrary, maintenance, repairs and replacements of the Common Elements (including the painting and repair of the exteriors of all Units such as Building walls, trim, drain pipes, roofs and similar exterior surfaces, but excluding doors and windows) shall be furnished by the Association as part of the Common Expenses, subject to the Bylaws and rules and regulations of the Association. If, due to the intentional act or negligence of an Owner or his invitee, guest or other authorized visitor, or an Occupant, damage is caused to the Common Elements or to a Unit or Units owned by others, or maintenance, repairs or replacements are required which would otherwise be at the common expense, then such Owner, to the extent permitted under Arizona law, shall pay for such damage and for such maintenance, repairs and replacements as may be determined by the Board, to the extent not covered by the Association’s insurance. An authorized representative of the Board, or of the manager or managing agent of the Property, and all contractors and repairmen employed or engaged by the Board or such manager or managing agent, shall be entitled to reasonable access to each of the Units as may be required in connection with maintenance, repairs or replacements of or to the Common Elements or any equipment, facilities or fixtures affecting or serving other Units and the Common Elements.

See Respondent’s Exhibit 3. Emphasis added.

Petitioner presented the testimony of Ray Odom, a general contractor who performed the mold remediation and drywall repairs at Petitioner’s home. Mr. Odom testified that there was water damage in the garage that permeated through the garage and onto the patio due to improper drainage, and because there was no flashing installed in the roof line and no plastic sheathing installed prior to applying the stucco. Consequently, the wood was not waterproofed. Mr. Odom explained that the purpose of the flashing is to divert water, and the lack of installation of flashing is a design flaw with the roof. Mr. Odom testified that water damage and mold will occur every time it rains if flashing is not installed. Mr. Odom testified regarding the photographs submitted by Petitioner depicting the water damage and wood rot. See Petitioner’s Exhibit 1. Mr. Odom opined, based upon his years of experience as a contractor, that “property management companies generally cut corners.”

Dr. John Gilderbloom, a professor at the University of Louisville, testified regarding his extensive background and experience with housing. Dr. Gilderbloom testified that the lack of flashing in a roof is “a problem.” Dr. Gilderbloom testified that he contacted over one hundred roofing contractors and all of them informed him that the installation of flashing is standard practice. Dr. Gilderbloom opined, based upon his experience, that “in developments, they cut corners.” Dr. Gilderbloom asserted that Respondent is responsible for “the outside” and that the “roof is the responsibility of the HOA.”

Petitioner testified that “if the former owner [of the Unit] and Amcor [the property management company] could have split costs” this hearing would not be necessary. Petitioner asserted that the issue was with the roof, exterior wall, and patio wall due to an ill constructed roof and pergola. Petitioner testified that she was seeking a “finding of negligence in the primary construction of the roof” in order to “move forward with a civil lawsuit.”

Respondent argued that a finding of negligence is outside the purview of this administrative hearing as the statutory framework for this proceeding limits Petitioner’s remedies to an Order to comply with the community documents or a civil penalty if a violation is found. Further, there is no ongoing or current issue, but rather a past issue, and therefore, an Order to comply would be inappropriate.

Tonia Reynolds, Respondent’s property manager, testified that approximately three months after moving into the Unit, Petitioner had informed her of the water leaks and mold in the hallway closet and of the renovations Petitioner had performed. Ms. Reynolds testified that in response to the information obtained from Petitioner, Respondent had a roofing contractor, Payne Roofing, conduct a roof inspection of Petitioner’s Unit. See Respondent’s Exhibit 1. The roofing inspection report is dated October 18, 2019, and indicates that: i) Underlayment looks to be in good condition; ii) The leak appears to be an old issue; and iii) No work needed at this time. Id.

Ms. Reynolds also testified regarding Respondent’s “Roof Log” that demonstrates that on October 9, 2015, Westside Roofing performed the following work to the roof of Petitioner’s Unit: “Tile Section remove existing concrete roof tiles remove existing wood nailer strips and haul away install tile underlayment and new 1x2 wood nailer strips provide and install new valley metal and metal flashings as needed Fix trim provide new concrete tile trim and field tiles to replace any broken or missing tiles.” See Respondent’s Exhibit 2. Ms. Reynolds explained that the Roof Log entries are generated from the invoices received for any work performed to the roof.

Ms. Reynolds further testified that the next time Petitioner brought an issue to her attention was approximately three months later when Petitioner had work performed on her balcony. Petitioner complained of water damage and rot. Ms. Reynolds testified that she informed Petitioner that the previous owner of the Unit experienced similar issues due to the pergola. Ms. Reynolds explained that the pergola was replaced by the previous owner, however, that owner did not want to replace the damaged and rotted wood causing the pergola to detach, and instead, only had stucco installed over the wood rot. The previous homeowner contracted directly with a contractor, 99 Home Improvements, to perform work set forth in the Affidavit of Tom Reynolds, Lead for 99 Homes Improvements, as follows:

3. . . . [W]e were called out to inspect possible water damage after we were told the stucco was pulling away from the pergola. This was in or around April 2019; a copy of the invoice is attached as Exhibit 1 to this Declaration.

4. We ultimately repaired the stucco at the direction of the owner; Las Hadas Villas was not responsible for our bills, as our understanding is that area is supposed to be maintained by the owner and not Las Hadas. The prior owner specifically told us that he did not want to replace the underlying material, but just the pergola and a patch of stucco.

See Respondent’s Exhibit 4.

The invoice for the work performed by 99 Home Improvements was addressed to the previous owner of the Unit and is dated April 4, 2019. Id.

Ms. Reynolds further testified regarding CC&Rs sections 14.1 and 14.2, specifically that the roof is Respondent’s responsibility, however, the patio is the homeowners’ responsibility, as it is an area of exclusive control. See Respondent’s Exhibit 3. Ms. Reynolds further testified that in early 2020, Petitioner presented her case to the Board, and pursuant to Section 14.1, the Board determined that the pergola and balcony area are Petitioner’s responsibility and did not vote to reimburse Petitioner for the damages and repair. Petitioner appealed the Board’s decision and was once again denied reimbursement. The Board suggested that Petitioner file a lawsuit against the previous owner of the Unit for failing to disclose the issue. Respondent submitted into evidence the Residential Seller Disclosure Advisory which states that “Arizona law requires the seller to disclose material (important) facts about the property, even if you are not asked by the buyer or a real estate agent. . . .” See Respondent’s Exhibit 5. The Residential Seller Disclosure Advisory fails to disclose the condition. Id.

Respondent argued that the roof was repaired in 2015, to include underlayment and flashing, a roofing contractor inspected the roof and found it to be in proper condition, the previous owner had work performed to the pergola and covered the underlying wood rot, the patio is the homeowner’s responsibility, and pursuant to CC&R Section 14.1, the decision of the Board to not reimburse Petitioner, is final.

CONCLUSIONS OF LAW

Arizona statute permits an owner or a planned community organization to file a petition with the Department for a hearing concerning violations of planned community documents or violations of statutes that regulate planned communities. A.R.S. § 32-2199. That statute provides that such petitions will be heard before the Office of Administrative Hearings.

Petitioner bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence. See Ariz. Rev. Stat. section 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). Respondent bears the burden to establish affirmative defenses by the same evidentiary standard. See A.A.C. R2-19-119(B)(2).

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.” Black’s Law Dictionary at page 1220 (8th ed. 1999).

The plain reading of the CC&Rs provides that each owner shall be responsible for the maintenance and repair of any exclusive use area. Petitioner’s patio and pergola are subject to her exclusive control, possession, and use. Therefore, Respondent is not responsible for the repair or maintenance of such. The evidence of record established that the previous owner of the Unit had repairs to the pergola performed at his own expense, however, he failed to remedy the wood rot beneath and covered resulting damage with stucco. While Respondent is responsible for the roof, the evidence of record established that the roof was repaired in 2015, to include flashing, and that a roofing contractor inspected the roof and found it in proper condition.

Therefore, this Tribunal concludes that Petitioner failed to establish that Respondent violated the provisions of Section 14.2 of the CC&Rs.

ORDER

IT IS ORDERED that Petitioner’s petition is dismissed.

NOTICE

Pursuant to A.R.S. §32-2199.02(B), this Order is binding on the parties unless a rehearing is granted pursuant to A.R.S. § 32-2199.04. Pursuant to A.R.S. § 41-1092.09, a request for rehearing in this matter must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of this Order upon the parties.

-54864001

001

-137160-45720000Done this day, April 7, 2021.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Judy Lowe, Commissioner

Arizona Department of Real Estate

-54864001

001

-137160-45720000