HOA - ALJDEC decisions

23F-H026-REL · Department of Real Estate - H/C · 2023-04-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

Elizabeth Flint,

Petitioner,

Citation Gardens Cooperative #1,

Respondent.

No. 23F-H026-REL

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: March 21, 2023

APPEARANCES: Petitioner Elizabeth Flint appeared on her own behalf. Respondent Citation Gardens Cooperative #1 did not appear.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Petitioner’s Claim

Citation Gardens Cooperative #1 (“Respondent”) is a non-profit corporation that was formed “for the purpose of acquiring, owning and operating a cooperative housing project” whose members/stockholders “shall have the right to occupy the dwelling units . . .” A Member is the “owner and holder of one (1) share of common capital stock of the Corporation and has a bona fide intention to reside in the project.”

Elizabeth Flint (“Petitioner”) is a Member of Respondent and resides in one of Respondent’s 44 units.

Petitioner filed a single-issue petition with the Arizona Department of Real Estate (“Department”) alleging that Respondent “. . . informed me that my request to install solar panels on the front of my townhouse had been denied. No reasons or additional details were provided. I feel that this decision by the Co-op is in violation of ARS 33-1816(A).”

Respondent, through Tucson Realty & Trust Co. Management Services, L.L.C. Cooperative HOA Division, filed a written answer to the petition, alleging that the statute referenced by Petitioner in her petition, A.R.S. § 33-1816(A), does not apply to Respondent because it is “governed by the Arizona Non-Profit Corporation Act,” that Petitioner is not a homeowner, but rather a Member of Respondent, and that Respondent is not a planned community, but rather a Cooperative Corporation.

The Department referred the petition to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

A hearing was held on March 21, 2023. Administrative Notice was taken of the agency record. Petitioner testified on her own behalf. Respondent did not appear. Petitioner informed the Tribunal that Andrew Vizcarra, Respondent’s representative, emailed her prior to the hearing, stating that he would not be attending the hearing and did not wish to reschedule it, and requested that the documents Respondent submitted to the Department “stand in his place.” Respondent did not notify the Office of Administrative Hearings of any cause for the absence or delay and did not request that the hearing be continued. Consequently, given that Respondent was properly noticed of the hearing, the hearing proceeded in Respondent’s absence.

Referenced Statute

A.R.S. § 33-1816 provides as follows:

A. Notwithstanding any provision in the community documents, an association shall not prohibit the installation or use of a solar energy device as defined in section 44-1761.

Hearing Evidence

Petitioner testified that she purchased her unit through a real estate agent and paid cash. Petitioner testified that prior to making the purchase, she had to apply to be admitted to Respondent. Petitioner further testified that she does not have a deed to the property, but rather has a Certificate of Membership. Petitioner explained that she can sell her unit if she chooses to do so and owns it outright. Petitioner further explained that she owns 1/44 of the corporation as a shareholder.

Petitioner addressed Respondent’s response to her petition. Petitioner asserted that the Nonprofit Act and a planned community are not mutually exclusive and that a cooperative is not listed in the exclusions under the statutory definition of planned community. Petitioner further asserted that the definition of a planned community includes both owners and members, and that the terms “member” and “shareholder” are used interchangeably in Respondent’s rules and regulations.

Petitioner testified that the buildings and grounds are maintained by Respondent and that the members pay a monthly assessment that pays the property taxes collectively, and also pays for water and trash removal.

Petitioner asserted that a request for solar panels cannot be denied under A.R.S. § 33-1816, and that Respondent provided no reason for the denial.

CONCLUSIONS OF LAW

Pursuant to A.R.S. § 32-2199.01(A), “[f]or a dispute between an owner and a condominium association or planned community association that is regulated pursuant to title 33, chapter 9 or 16, the owner or association may petition the department for a hearing concerning violations of condominium documents or planned community documents or violations of the statutes that regulate condominiums or planned communities.” 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 violated applicable statutes, CC&Rs, and/or Bylaws by a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

In this case, Petitioner asserts that Respondent is a planned community, and therefore, cannot prohibit her from installing solar panels.

Planned community is defined in A.R.S. § 33-1802 as follows:

"Planned community" means a real estate development that includes real estate owned and operated by or real estate on which an easement to maintain roadways or a covenant to maintain roadways is held by a nonprofit corporation or unincorporated association of owners, that is created for the purpose of managing, maintaining or improving the property and in which the declaration expressly states both that the owners of separately owned lots, parcels or units are mandatory members and that the owners are required to pay assessments to the association for these purposes. Planned community does not include any of the following:

(a) A timeshare plan or a timeshare association that is governed by chapter 20 of this title.

(b) A condominium that is governed by chapter 9 of this title.

Emphasis added.

Respondent is a nonprofit corporation that was formed for the purpose of acquiring, owning and operating a cooperative housing project. A planned community is a real estate development that includes real estate owned and operated by a nonprofit corporation, created for the purpose of managing, maintaining or improving the property. Although the definition of a planned community does not expressly exclude a cooperative, the Administrative Law Judge concludes that a cooperative does not fall within the definition of a planned community, as their purposes and functions are separate and distinct.

Therefore, because Respondent does not fall within the definition of a planned community, it is held that Petitioner failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1816.

order

IT IS ORDERED that no action is required of Respondent in this matter and that the 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

-137160-45720000 Done this day, April 4, 2023.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile April 4, 2023 to:

Susan Nicolson, Commissioner

Arizona Department of Real Estate

[email redacted]

Elizabeth Flint

[email redacted]

Tucson Realty & Trust Co.

[email redacted]

By: OAH Staff