HOA - ALJDEC decisions

23F-H066-REL · Department of Real Estate - H/C · 2023-11-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sebastien Verstraet

Petitioner

Monterey Ridge Condominium Association

No. 23F-H066-REL

ADMINISTRATIVE LAW JUDGE DECISION

Respondent

HEARING: October 26, 2023

APPEARANCES: Petitioner Sebastien Verstraet appeared on his own behalf. Respondent Monterey Ridge Condominium Association was represented by Josh Bolen Esq. and Marcus R. Martinez, Esq.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Order to the Commissioner of the Arizona Department of Real Estate (“Department”).

FINDINGS OF FACT

Background and Procedure

The Department is authorized by statute to receive and to decide petitions for hearings from members of homeowners’ associations and from homeowners’ associations in Arizona.

On or about May 23, 2023, Petitioner filed a single-issue petition against the Association with the Department. Petitioner tendered $500.00 to the Department with his petition.

On or about June 22, 2023, the Monterey Ridge Condominium Association (“Association”) filed its Answer with the Department whereby it denied all complaint items in the petition.

Per the Notice of Hearing, the Department referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 22, 2023, regarding the following issue based on Petitioner’s petition:

[Respondent] is stating that I am in violation of section 4.24 "Flooring Restriction for New Units" on pages 1-2 of the CC&Rs Sixth Amendment due to the noise disturbance it may cause; however the flooring that I installed is LVP, which has a sound rating measured by International standard similar to the required carpet flooring.

The Parties and Governing Documents

Respondent is a homeowners’ association whose members own properties in a condominium located in Scottsdale, Arizona.

Petitioner is a property owner and a member of the Association.

The Association is governed by its Amended and Restated Condominium Declaration (“Declaration”), and overseen by a Board of Directors (“the Board”). The Association is also regulated by Title 33, Chapter 9 of the Arizona Revised Statutes (“Ariz. Rev. Stat.”)

Hearing Evidence

Petitioner testified on his own behalf and called Ron Riecks as a witness. Respondent called Robert Stein as a witness and submitted four exhibits into evidence. The Agency Record from the Department and Notice of Hearing were also admitted into the evidentiary record.

Petitioner’s testimony

Petitioner testified that in January 2023 he closed on Unit 3055 in the Monterey Ridge Condominiums. Petitioner testified that he was given the Declaration and community documents approximately one week before closing, however did not fully read the same.

Further, Petitioner testified that he wanted to install Luxury Vinyl Plank (LVP) flooring where there was existing carpeting, and proceeded to do the same without first notifying the Association. Petitioner testified that he believed the LVP flooring would enhance not only the look of his unit, but the increase potential resale value as well.

Ron Riecks’ testimony

Mr. Reicks was the installer of the LVP flooring for Petitioner, and was curious as to why the flooring was not allowed, as there was already LVP in the kitchen, bathroom and laundry room. Mr. Riecks testified that the soundproof rating was 63, and that most condominiums require a threshold of 50.

Robert Stein’s testimony

Mr. Stein was the Community Manager for City Property Management who managed the property. He testified that in December 15, 2015, section 4.24 was amended to read the following:

4.24 Flooring Restriction for New Units. Except for entry areas where hard floor coverings have been installed by Declarant, and except for kitchen, bathroom and laundry areas, hard floor coverings (e.g., ceramic tile, natural stone, vinyl, hardwood or laminated flooring) shall be prohibited in all other areas of the following Units: second floor Units 2019, 2037, 2046, 2055, 2064, 2073, 2082, 2091, 2118, 2127, 2136, 2145, 2154, 2163, 2172, 2181; and all third floor Units. Carpet and pad shall be required in all such areas to mitigate the noise disturbance to first and second-floor Units. The Rules shall include an illustration of the only areas where hard floor coverings are permitted in the foregoing Units.

Further, Mr. Stein testified that the Association Rules as of 2015, state the following:

Floor Coverings. As set forth in Section 4.24 of the Declaration, hard floor coverings have been prohibited in designated areas or certain “New Units,” as such term is defined in the Declaration, to mitigate noise disturbance to first and second- floor Units. The areas of those New Units in which hard floor coverings will be permitted are illustrated on Exhibit 1 attached hereto.

Mr. Stein testified that he had gone up to Petitioner’s residence and noticed that the LVP flooring was being installed and informed him that he was not permitted to install the same. This led to a letter on or about February 28, 2023, wherein Petitioner was informed that he may be fined for violation for the Declaration and Rules.

Next Mr. Stein testified that Petitioner requested a hearing before the Board, but the Board upheld the violation.

Finally, Mr. Stein testified that the property management company sends all community documents to the buyer prior to closing so that the buyer may review the same.

Conclusions of Law

This matter lies within the Department’s jurisdiction. Pursuant to Ariz. Rev. Stat. §§ 32-2102 and 32-2199 et al., regarding a dispute between an owner and a planned community association, the owner or association may petition the department for a hearing concerning violations of community documents or violations of the statutes that regulate planned communities as long as the petitioner has filed a petition with the department and paid a filing fee as outlined in Ariz. Rev. Stat. § 32-2199.05.

Pursuant to Ariz. Rev. Stat. §§ 32-2199(2), 32-2199.01(D), 32-2199.02, and 41-1092, OAH has the authority to hear and decide the contested case at bar.

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated the Declarations and Association Rules.

“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.”

The tribunal finds that Petitioner has not met his burden. Petitioner admitted in his testimony that he timely received a copy of the Declaration and Rules approximately a week prior to closing. Petitioner also admitted that he did not fully read the same. Finally, Petitioner admitted that he did not seek permission from the Association to install the LVP flooring, which had he done, he probably would have been informed that the Rules did not allow for the same. While Petitioner probably had valid points about the look and potential value of LVP flooring versus carpeting, unfortunately, the Declarations and Rules are clear and unambiguous, that but for the kitchen, laundry room and bathroom, any flooring installed in third floor units, besides carpeting was prohibited.

ORDER

IT IS ORDERED that Petitioner’s petition in this matter be denied.

IT IS FURTHER ORDERED pursuant to Ariz. Rev. Stat. § 32-2199.02(A), Respondent shall not reimburse Petitioner’s filing fee as required by Ariz. Rev. Stat. § 32-2199.01.

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, November 13, 2023.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile November 13, 2023 to:

Susan Nicolson

Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

Attn:

[email redacted]

Marcus R. Martinez

[email redacted]

Sebastien Verstraet

[email redacted]

By: OAH Staff