HOA - ALJDEC decisions

22F-H2222028-REL · Department of Real Estate - H/C · 2022-06-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Asmaa Kadhum,

Petitioner,

vs.

Goldcrest Patio Homes Condominium Association,

Respondent.

No. 22F-H2222028-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 4, 2022

APPEARANCES: Petitioner Asmaa Kadhum appeared on her own behalf. Jerry Latschar, Vice President of the Board of Directors, appeared on behalf of Respondent Goldcrest Patio Homes Condominium Association.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Goldcrest Patio Homes Condominium Association (Respondent) is an association of condominium owners located in Scottsdale, Arizona.

On or about January 12, 2022, Asmaa Kadhum (Petitioner) filed a petition with the Arizona Department of Real Estate (Department), alleging that Respondent had violated the provisions of A.R.S. Title 33, Chapter 16, Section 33-1256. Petitioner specifically alleged, in relevant part, as follows:

Requesting to Waive/or Adjust Unreasonable Collection Fees.

According to Article 33-1256, when HOA places a lien against a Unit they should have assessments for reasonable collection fees and for reasonable attorney fee.

Gold Crest Patio Homes Association is charging us legal fees for a lien they have placed (and released because it was invalid) against our unit Unit#101 of $2,351.40

All errors in original.

On or about January 12, 2022, the Department issued a notice to Respondent regarding the petition.

On or about January 26, 2022, Respondent filed an answer to the petition denying all allegations.

On or about February 11, 2022, the Department issued a Notice of Hearing to the parties notifying them that a hearing on the petition would be conducted by the Office of Administrative Hearings.

On April 4, 2022, a hearing was held on the petition and the parties presented evidence and argument regarding the violation alleged in the petition.

Based on the evidence presented at the hearing, the following events occurred.

Prior to May 1, 2019, Petitioner failed to pay assessments and fees totaling $1,375.00.

On or about May 1, 2019, property management responsibilities for Respondent moved from an outside company, AAMG, to Respondent.

Between May 1, 2019, and August 1, 2019, Petitioner did not pay the monthly assessments and incurred additional late fees during that time.

Petitioner made payments for two months’ assessment fees each on September 4, 2019, October 7, 2019, November 15, 2019, and January 9, 2020.

Petitioner made payments for a single month’s assessment on December 10, 2019, February 8, 2020, March 13, 2020, April 9, 2020, June 16, 2020, July 16, 2020, August 13, 2020.

Late fees were incurred in May 2020, June 2020, and July 2020.

By letter dated April 21, 2020, Respondent provided notice to Petitioner that Petitioner owed $1,435.00 in past due assessments and fees. The letter also indicated that if Petitioner did not bring the account current or make arrangements to do so within 30 days, the account would be turned over for further collection proceedings.

On April 30, 2022, Petitioner responded to the notice with an email in which Petitioner stated that it was “not a good timing for collections” and that the late fees should be removed as agreed so the total amount due was $1,350.00, not $1,435.00. Petitioner stated that they were planning to pay the whole amount “after this pandemic goes away.”

On June 15, 2020, Respondent filed a Notice of Lien on Petitioner’s unit indicating a lien amount of $2,199.00.

On August 7, 2020, Respondent’s attorney sent Petitioner a notice that the total amount due at that time, including past due assessments, late fees, legal fees, and other charges, was $2,504.00. It was also noted that an additional $104.00 would accrue for the recording of the Release of Lien once the past due amount had been paid.

On or about September 10, 2020, Petitioner notified Respondent that the lien amount of $2,199.00 was incorrect and their attorney had advised that this constituted an improper lien.

On November 13, 2020, Respondent recorded a Release of Lien against Petitioner’s unit.

On December 10, 2020, Respondent’s attorney notified Respondent that because the original Notice of Lien “included late fee charges that were found to be invalid . . . a Release of Lien was recorded in order to protect [Respondent] and our firm from a potential false lien claim.”

After the Release of Lien was filed, Respondent maintained Petitioner owed approximately $3,500.00 in legal fees accrued to collect the past due amount.

Petitioner testified at hearing that Respondent placed a lien on the property based on false statements and invoices. Petitioner questioned how Respondent determined the legal fees of $3,500.00 was due at the time of the hearing. Petitioner maintained that they should not be required to pay for legal fees incurred because Respondent acted improperly. Petitioner acknowledged that the Release of Lien had been filed and no lien was then in place against the property.

Mr. Latschar testified that all of the past due amounts and fees had been paid and the only balance remaining was the legal fees Respondent had incurred attempting to collect the past due amount. Mr. Latschar was uncertain where the $3,500.00 total originated. After the hearing, Mr. Latschar submitted four invoices from counsel showing total charges of $661.50 attributable to Petitioner’s matter between August 1, 2020, and November 30, 2020.

CONCLUSIONS OF LAW

The Department has jurisdiction to hear disputes between a property owner and a condominium owners association. A.R.S. § 32-2199 et seq.

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated A.R.S. § 33-1256. A.A.C. R2-19-119.

A preponderance of the evidence is “[e]vidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990).

A.R.S. § 33-1256 provides, in relevant part, as follows:

A. The association has a lien on a unit for any assessment levied against that unit from the time the assessment becomes due. The association's lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the owner has been delinquent in the payment of monies secured by the lien, excluding reasonable collection fees, reasonable attorney fees and charges for late payment of and costs incurred with respect to those assessments, for a period of one year or in the amount of $1,200 or more, whichever occurs first, as determined on the date the action is filed.

At the time of the hearing, Respondent did not have a recorded lien against the property as it had previously been released. While Respondent asserted that Petitioner owed approximately $3,500.00 in legal fees related to the collection of past due assessments, Respondent was not pursuing any enforcement action to collect that amount allegedly owed at the time the petition was filed or the hearing was held in this matter.

The documents submitted from Respondent after the hearing do not support a finding that Petitioner owed $3,500.00 in legal fees, but only owed a total amount of $661.50 in legal fees. However, because the documents were submitted after the hearing concluded in this matter, it was not possible to question either party on the information contained in the documents.

Thus, Petitioner failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1256.

ORDER

IT IS ORDERED that Petitioner’s petition is denied.

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, June 9, 2022.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile June 6, 2022 to:

Louis Dettorre, Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Attn:

[email redacted]

Goldcrest Patio Homes Condo Association

c/o Jerry Latschar (Statutory Agent)

14955 W Bell Rd, Box 9304

Surprise, AZ 85374

Asmaa Kadhum

4933 W Marcus Dr.

Phoenix, AZ 85083

By: Miranda Alvarez

Legal Secretary