HOA - ALJDEC decisions

25F-H017-REL · Department of Real Estate - H/C · 2025-02-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Millard C. and Samantha Finch

Petitioners,

v.

Mountain Gate Community aka Copper Canyon Ranch,

Respondent.

No. 25F-H017-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 7, 2025.

APPEARANCES:

For Petitioners: Samantha and Millard Finch.

For Respondents: Attorney B. Austin Baillio.

ADMINISTRATIVE LAW JUDGE: Samuel Fox

EXHIBITS ADMITTED INTO EVIDENCE: Notice of Hearing File, provided by the Department of Real Estate. Petitioners’ Exhibits 1 through 10. Respondent’s Exhibits 1 through 8.

_____________________________________________________________________

FINDINGS OF FACT

Petitioners’ Claim

Mountain Gate Community aka Copper Canyon Ranch (“Respondent”) is a planned community association in Surprise, Arizona.

Millard C. and Samantha Finch (“Petitioners”) owned a home located at 14561 W. Sierra Street, Surprise, Arizona 85379, and were members of Respondent.

On or about October 15, 2024, Petitioners filed a four-issue Petition with the Arizona Department of Real Estate (“Department”) alleging that Respondent had violated Planned Community Statutes, A.R.S. §§ 33-1803(A), (B), and 33-1242(A)(11); its Bylaws, Article 3.12; and CC&Rs, Article 6.10.5, 6.9, and 6.10.1. The four issues identified in the Petition, for which Petitioners paid the requisite $2,000.00 filing fee, were as follows:

Issue1: The Association and the Board levy a $45.00 charge [$15.00 late charge for delinquent assessment in tandem with $30.00 “late notice fee”] against the Account of Mr. and Mrs. Finch Account when their assessment is paid before or on the due date, in violation of ARS 33-1803(B), and Association Rules and Design Guidelines, Article 5.2 , Article 6.10.5, and Article 6.9. (ATCH 1 – Petitioner’s Letter, dated June 28, 2024 re: “Unpublished and Invalid Fees Levied Against Account and Pre-Legal Department Asserting Association’s Authority to Collect on Unpublished and Invalid Fees”)

Issue 2: The $45.00 charge [$15.00 late charge for delinquent assessment in tandem with $30.00 “late notice fee”] the Association and the Board levy against Mr. and Mrs. Finch’s Account for each discrete instance the Association and the Board deem Mr. and Mrs. Finch to be delinquent in their assessment, exceeds the ‘not greater than $15.00” remedy for delinquent assessment, in violation of ARS 33-1803(A) which provides that “Charges for the late payment of assessments are limited to the greater of fifteen dollars [...]”, in violation of CC&R Article 6, Section 6.10.1 which provides that “...[t]he Board may establish a late fee, not to exceed the greater of fifteen dollars ($15.00) [...] (but in no event an amount greater than permitted under applicable law) (ATCH 1 – Petitioner’s Letter, dated June 28, 2024 re: “Unpublished and Invalid Fees Levied Against Account and Pre-Legal Department Asserting Association’s Authority to Collect on Unpublished and Invalid Fees”) (cont'd - See Attached)

Issue 3: The Association and the Board levy $30.00/ $20.00 “late notice fees” against Mr. and Mrs. Finch’s Account without providing notice – failing to answer the pragmatic question ‘what is a late notice fee’—in violation of ARS §33-1803(B), ARS §33-1242(A)(11), which provides that while the board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association, the monetary penalties may be imposed only “after notice and an opportunity to be heard”, in violation of ARS 33-1803(A) which provides that while “[...] the board of directors may impose reasonable charges for the late payment of assessments [...] Charges for the late payment of assessments [...] may be imposed only after the association has provided notice”, and in violation of the Association Rules and Design Guidelines, “Violations; Imposition of Fines; Other Corrective Action” (pg. 14) which states that “[n]o fines shall be imposed without first providing a notice of the violation from the Association to the Owner [...]”.

Issue 4: The Association and the Board’s pre-legal team threaten the Association’s authority to foreclose the Assessment Lien [Article 6, Section 6.10.5 (ii)] and the Association’s authority to bring legal action to hold an Owner personally liable for delinquent assessment and personally liable for the $30.00 “late notice fees” [Article 6, Section 6.10.5(i)], and threaten the Association’s authority to record a Notice of Lien against Owner’s Lot [Article 6.10.2] when Mr. and Mrs. Finch are not delinquent in their assessment in violation of ARS 33-1807(A) which provides that for the Association to “bring[...] an action at law against the Owner personally obligated to pay the delinquent Assessments [...] (Article 6.10.5 (i)), or “bring[...] an action to 2 foreclose the Assessment Lien against the Lot” (id (ii)), there must exist a cause – “owner has been delinquent in the payment of monies secured by the lien.”

Respondent, through its Attorney, Austin Baillio, filed a written answer to the Petition, denying all allegations.

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

A hearing was held on February 7, 2025. Administrative Notice was taken of the agency record. Samantha Finch testified on behalf of Petitioners. Jonathan Sweat, former Community Manager, and Melinda Montoya, Accounts Receivable Manager for First Service Residential, testified for Respondent.

Referenced Bylaws

Article 3.12 of the Bylaws provided in relevant part as follows:

The Board may employ for the Association and the Project a “Managing Agent” at a compensation established by the Board. The Managing Agent shall perform such duties and services as the Board shall authorize, including, but not limited to, all of the duties listed in the Project Documents except for such duties and services that under the Project Documents may not be delegated to the Managing Agent. The Board may delegate to the Managing Agent all of the powers granted to the Board or the officers of the Association by the Project Documents other than the power (i) to adopt the annual budget, any amendment thereto or to levy Assessments; (ii) to adopt, repeal or amend Association Rules; (iii) to designate signatories on Association bank accounts; (iv) to borrow money on behalf of the Association; (v) to acquire real property. So long as the Declarant owns any Lot, any change in the Managing Agent must be approved in writing by the Declarant.

Community Rules and Design Guidelines

Page 2, under the header Finance, provided in relevant part as follows:

The following rules apply to the payment of Assessments for the Project:

1st day of each month:

Assessment is due and payable to the Association at the address provided by the Property Manager to each Owner of a Lot

15th day of each month:

If the Community Manager has not received an Assessment payment by this date, a late payment charge not to exceed the greater of Fifteen Dollars ($15.00) or ten percent (10%) of the amount of the unpaid Assessment or installment thereof shall be charged to each Owner of a Lot. Owner may be notified that the Association intends to record a notice of claim of lien.

30th day of the month following the Assessment due date:

If the Community Manager has not received the Assessment payment(s) within thirty (30) days of the due date(s), the Board may authorize the Property Manager to record a notice of lien against the Owner’s Lot and file a lawsuit in the appropriate Court to collect the past due Assessment(s). The amount to be collected under the lawsuit will include interest on the past due Assessment(s), amounts expended by the Association to record the notice of lien and prosecute the lawsuit.

Page 14, under the header Violations; Imposition of Fines; Other Corrective Action, provided in relevant part as follows:

FINES: No fine shall be imposed without first providing a notice of the violation from the Association to the Owner describing the violation and stating that failure to correct the violation within a specified period of time shall make the Owner subject to imposition of a fine. Failure to pay any fine shall subject the Owner to the same potential penalties and enforcement as failure to pay any assessments.

Referenced Statutes

A.R.S. §§ 33-1803(A) and (B) provided in relevant part as follows:

A. . . . Unless reserved to the members of the association, the board of directors may impose reasonable charges for the late payment of assessments. A payment by a member is deemed late if it is unpaid fifteen or more days after its due date, unless the community documents provide for a longer period. Charges for the late payment of assessments are limited to the greater of fifteen dollars or ten percent of the amount of the unpaid assessment and may be imposed only after the association has provided notice that the assessment is overdue or provided notice that the assessment is considered overdue after a certain date. Any monies paid by the member for an unpaid assessment shall be applied first to the principal amount unpaid and then to the interest accrued.

B. After notice and an opportunity to be heard, the board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association. Notwithstanding any provision in the community documents, the board of directors shall not impose a charge for a late payment of a penalty that exceeds the greater of fifteen dollars or ten percent of the amount of the unpaid penalty. A payment is deemed late if it is unpaid fifteen or more days after its due date, unless the declaration, bylaws or rules of the association provide for a longer period. Any monies paid by a member for an unpaid penalty shall be applied first to the principal amount unpaid and then to the interest accrued. Notice pursuant to this subsection shall include information pertaining to the manner in which the penalty shall be enforced.

A.R.S. §§ 33-1807(A) and (K) provided as follows:

A. The association has a common expense lien on a property for any assessment levied against that property from the time the assessment becomes due. The association's common expense lien may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the owner has been and remains delinquent in the payment of 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. The association board of directors shall exercise reasonable efforts to communicate with the member and offer a reasonable payment plan before filing a foreclosure action. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due.

K. Notwithstanding any provision in the community documents or in any contract between the association and a management company or any other agent of the association, including any agreement or contract with any attorney, unless the member directs otherwise, all payments received on a member's account shall be applied first to any unpaid assessments, due but not delinquent assessments, unpaid charges for late payment of those assessments if authorized in the declaration, unpaid reasonable collection fees and costs incurred or applied by the association, and unpaid attorney fees and costs incurred with respect to those assessments if awarded by a court, in that order, with any remaining amounts applied next to other unpaid fees, charges and monetary penalties or interest and late charges on any of those amounts.

A.R.S. § 33-1242(A)(11) provided as follows:

A. Subject to the provisions of the declaration, the association may: . . .

11. Impose charges for late payment of assessments after the association has provided notice that the assessment is overdue or provided notice that the assessment is considered overdue after a certain date and, after notice and an opportunity to be heard, impose reasonable monetary penalties on unit owners for violations of the declaration, bylaws and rules of the association.

Referenced Covenants, Conditions and Restrictions

CC&R Section 6.1.1 provided as follows:

The Assessments, together with interest, late charges and all costs, including but not limited to reasonable attorneys' fees, incurred by the Association in collecting or attempting to collect delinquent Assessments, whether or not suit is filed, shall be a charge on the Lot and shall be a continuing lien upon the Lot against which each such Assessment is made. Each Assessment, together with interest and all costs, including but not limited to reasonable attorneys' fees, incurred by the Association in collecting or attempting to collect delinquent Assessments, whether or not suit is filed, shall also be the personal obligation of the person who was the Owner of the Lot at the time when the Assessment became due.

CC&R Section 6.9 provided as follows:

Rules Regarding Billing and Collection Procedures. Annual Assessments and Neighborhood Assessments shall be collected on a monthly or quarterly basis or such other basis as may be selected by the Board. Special Assessments may be collected as specified by the Board. The Board shall have the right to adopt rules and regulations setting forth procedures for the purpose of making Assessments and for the billing and collection of the Assessments provided that the procedures are not inconsistent with the provisions of this Declaration. The failure of the Association to send a bill to a Member shall not relieve any Member of his liability for any Assessment or charge under this Declaration, but the Assessment Lien therefor shall not be foreclosed until the Member has been given not less than thirty (30) days written notice prior to such foreclosure that the Assessment or any installation thereof is or will be due and of the amount owing. Such notice may be given at any time prior to or after. delinquency of such payment. The Association shall be under no duty to refund any payments received by it even though the ownership of a Lot changes during an Assessment Period but successor Owners of Lots shall be given credit for prepayments, on a prorated basis, made by prior Owners.

CC&R Sections 6.10.1 and 6.10.5 provided as follows:

Effect of Nonpayment of Assessments; Remedies of the Association

6.10.1 Any Assessment or any installment of an Assessment not paid within fifteen (15) days after the Assessment or the installment of the Assessment first became due ( or such longer period of time as required by applicable law) shall be deemed delinquent and shall bear interest from the date on which such Assessment or installment of the Assessment became due at the rate of twelve percent (12%) per annum or the prevailing V NFHA interest rate for new home loans, whichever is higher. In addition, the Board may establish a late fee, not to exceed the greater of fifteen dollars ($15.00) or ten percent (10%) of the amount of the unpaid Assessment or installment thereof (but in no event an amount greater than permitted under applicable law), to be charged to any Owner who has not paid any Assessment, or any installment of an Assessment, within fifteen (15) days after such payment was due. Notwithstanding the foregoing, to the extent applicable law from time to time provides for any shorter period of time after which Assessments or any other amounts payable hereunder may or shall become delinquent, such shorter period of time may be established by the Board to apply in lieu of the time period set forth in this Section, and to the extent applicable law from time to time provides for any greater amount of late fee or other amount to be charged to any Owner deemed delinquent in the payment of any Assessment, or any installment of an Assessment, such greater amount may be established by the Board to apply in lieu of the late fee set forth in this Section. . . .

6.10.5 The Association shall have the right, at its option, to enforce collection of any delinquent Assessments together with interest, lien fees, reasonable attorneys' fees and any other sums due to the Association in any manner allowed by law including, but not limited to: (i) bringing an action at law against the Owner personally obligated to pay the delinquent Assessments and such action may be brought without waiving the Assessment Lien securing the delinquent Assessments and (ii) bringing an action to foreclose the Assessment Lien against the Lot in the manner provided by law for the foreclosure of a realty mortgage. The Association shall have the power to bid at any foreclosure sale and to purchase, acquire, hold, lease, mortgage and convey any and all Lots purchased at such sale.

Hearing Evidence

On or before September 9, 2019, Petitioner’s account incurred approximately $295.00 in fines.

On or about February 2020, First Service Residential (FSR) became the manager for Respondent. During the transition of FSR becoming the manager, and for the first few months thereafter, FSR did not impose late charges on assessments which were paid late.

FSR applied payments to an account as follows: first, payments were applied to delinquent assessments; then, payments were applied to assessments due but not delinquent; then, payments were applied to other amounts due.

For late payments, FSR charged a $15.00 Late Charge.

FSR also provided collection services for Respondent: an employee reviewed overdue accounts and processed overdue-payment paperwork, sending a collection notice to members with overdue accounts. FSR charged the Respondent for that service, which was directly passed on to the homeowner who incurred the charge. The $20.00 “Rebill Fee” and $30.00 “Late Notice Fee” were both charges for collection services provided by FSR.

Petitioners did not timely pay their assessment for April 2020.

In May 2020, Petitioners started paying their assessments using the ClickPay online portal. The portal stated as follows:

When scheduling your auto-payments, please ensure your payment withdrawal dates are ON or AFTER the 1st of each Billing Cycle. Your payment(s) will not post to your account if you do not follow this setup criteria. The upcoming assessment amount / balance will not reflect until the 1st of the billing cycle.

In May 2020, Petitioners paid their assessment, but the amount was applied to the unpaid April 2020 assessment, incurring a Late Charge and a Rebill Fee for May. In June 2020, Petitioners again paid their assessment, but the amount was applied to the unpaid May 2020 assessment, incurring a Late Charge and a Rebill Fee for June. In July 2020, Petitioners timely paid both their June 2020 and July 2020 assessments, and they did not incur any fees. In August 2020, Petitioners paid their assessment late, incurring a Late Charge and Rebill Fee. Petitioners did not pay their assessment for December 2021 until January 2022, incurring a Late Charge and a Late Notice Fee.

In November 2022, Petitioners attempted to pay their December assessment early. At the time of the early payment, the December assessment had not yet been posted to Petitioner’s account, and Petitioners did not communicate to FSR or Respondent that the payment was a prepayment of the December assessment. Accordingly, the payment was applied to past due amounts.

From January 2023 through February 2025, Petitioners continued to make payments, not understanding that their attempt to pre-pay the December 2022 assessment was unsuccessful. Accordingly, payments from January 2023 through February 2025 were applied to the previous month’s assessment, resulting in a Late Charge and Late Notice Fee every month.

For each month, Respondent and FSR provided Petitioners with a statement, each of which explained activity on the bill and the impact of paying late. As of December 2022, the bills clearly stated that if the payment is late, the amount due will increase by $45.00, consisting of a $15.00 Late Charge and a $30.00 Late Notice Fee.

Mr. Sweat testified that no efforts have ever been made to foreclose on Petitioners.

No evidence was entered in support of the allegation that Respondent threatened foreclosure, inappropriately or otherwise.

CONCLUSIONS OF LAW

A.R.S. § 32-2199 authorizes the administrative law judge to “adjudicate complaints regarding and ensure compliance with . . . [t]itle 33, chapter 16 and planned community documents.”

A.R.S. § 32-2199.01 permits a member of a planned community to file a petition with the Department for a hearing concerning the planned community association’s alleged violations as set forth in Title 33, Chapter 16. This matter lies within the Department’s jurisdiction.

A.R.S. § 32-2199.02 authorizes the administrative law judge to “order any party to abide by the statute, condominium documents, community documents or contract provision at issue and may levy a civil penalty on the basis of each violation.” This Tribunal is not authorized to order other remediation or order civil penalties for other conduct.

Petitioners bear the burden of proof to establish that Respondent violated applicable statutes, CC&Rs, and/or Bylaws by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.

“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.”

Complaint Number 1:

The Association and the Board levy a $45.00 charge [$15.00 late charge for delinquent assessment in tandem with $30.00 “late notice fee”] against the Account of Mr. and Mrs. Finch Account when their assessment is paid before or on the due date, in violation of ARS 33-1803(B), and Association Rules and Design Guidelines, Article 5.2 , Article 6.10.5, and Article 6.9. (ATCH 1 – Petitioner’s Letter, dated June 28, 2024 re: “Unpublished and Invalid Fees Levied Against Account and Pre-Legal Department Asserting Association’s Authority to Collect on Unpublished and Invalid Fees”)

For this issue, Petitioners argued that their payments were not late, but the Respondent charged a Late Charge anyways.

In accordance with A.R.S. § 33-1803, the CC&Rs and Community Rules and Design Guidelines state that an assessment payment is late if that payment is received after the 15th day of the month in which it is due.

A.R.S. § 33-1807(K) requires that “all payments received on a member's account shall be applied first to any unpaid assessments, due but not delinquent assessments, unpaid charges for late payment of those assessments if authorized in the declaration, unpaid reasonable collection fees and costs incurred or applied by the association.”

Respondent and FSR applied Petitioner’s statements to delinquent assessments first, followed by due but not delinquent assessments, and then other balances in accordance with A.R.S. § 33-1807(K).

The record established that Respondent and FSR correctly accounted for and applied Petitioners payments, and only late payments were designated as late, resulting in a Late Charge and the collection fees.

Petitioners’ argument that they made payments on time each month does not overcome the fact that payments were appropriately applied to the previous month’s assessment. Accordingly, Petitioners failed to demonstrate by a preponderance of the evidence that Respondent charged Late Charges for payments that were not late.

Complaint Number 2:

The $45.00 charge [$15.00 late charge for delinquent assessment in tandem with $30.00 “late notice fee”] the Association and the Board levy against Mr. and Mrs. Finch’s Account for each discrete instance the Association and the Board deem Mr. and Mrs. Finch to be delinquent in their assessment, exceeds the ‘not greater than $15.00” remedy for delinquent assessment, in violation of ARS 33-1803(A) which provides that “Charges for the late payment of assessments are limited to the greater of fifteen dollars [...]”, in violation of CC&R Article 6, Section 6.10.1 which provides that “...[t]he Board may establish a late fee, not to exceed the greater of fifteen dollars ($15.00) [...] (but in no event an amount greater than permitted under applicable law) (ATCH 1 – Petitioner’s Letter, dated June 28, 2024 re: “Unpublished and Invalid Fees Levied Against Account and Pre-Legal Department Asserting Association’s Authority to Collect on Unpublished and Invalid Fees”) (cont'd - See Attached)

For this issue, Petitioners argued that Respondents charged more than was permissible for Late Charges.

In accordance with A.R.S. § 33-1803, the CC&Rs and Community Rules and Design Guidelines state that a late fee for a late assessment payment is limited to $15.00.

CC&Rs section 6.1.1, provides that “[e]ach Assessment, together with interest and all costs . . . incurred by the Association in collecting or attempting to collect delinquent Assessments, whether or not suit is filed, shall also be the personal obligation of the person who was the Owner of the Lot at the time when the Assessment became due.”

CC&Rs section 6.10.5, also provides as follows: “[t]he Association shall have the right, at its option, to enforce collection of any delinquent Assessments together with interest, lien fees, reasonable attorneys' fees and any other sums due to the Association in any manner allowed by law.”

A.R.S. § 33-1807(K) contemplates an association charging collection fees to a member: “all payments received on a member's account shall be applied first to any unpaid assessments, due but not delinquent assessments, unpaid charges for late payment of those assessments if authorized in the declaration, unpaid reasonable collection fees and costs incurred or applied by the association.”

Respondent demonstrated that the Late Notice Fee and Rebill Fee were both collection costs charged to Respondent by FSR and passed on to Petitioners.

Petitioners failed to demonstrate by a preponderance of the evidence that the Late Notice Fee or the Rebill Fee were late fees, as limited under A.R.S. § 33-1803. Accordingly, Petitioners failed to meet their burden that Respondent was charging more than the allowable $15.00.

Complaint Number 3:

The Association and the Board levy $30.00/ $20.00 “late notice fees” against Mr. and Mrs. Finch’s Account without providing notice – failing to answer the pragmatic question ‘what is a late notice fee’—in violation of ARS §33-1803(B), ARS §33-1242(A)(11), which provides that while the board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association, the monetary penalties may be imposed only “after notice and an opportunity to be heard”, in violation of ARS 33-1803(A) which provides that while “[...] the board of directors may impose reasonable charges for the late payment of assessments [...] Charges for the late payment of assessments [...] may be imposed only after the association has provided notice”, and in violation of the Association Rules and Design Guidelines, “Violations; Imposition of Fines; Other Corrective Action” (pg. 14) which states that “[n]o fines shall be imposed without first providing a notice of the violation from the Association to the Owner [...]”.

For this issue, Petitioners argued that the Rebill Fees and Late Notice Fees were a impermissible penalties.

As discussed in Conclusions of Law 9 through 12, the Late Notice Fee and Rebill Fee were collection fees.

Collection fees are distinct from monetary penalties.

For example, A.R.S. § 33-1807(K) considers collection fees and monetary penalties as different kinds of charges: “unpaid reasonable collection fees and costs incurred or applied by the association” and “other unpaid fees, charges and monetary penalties or interest and late charges on any of those amounts.”

Aside from the assertion that the Rebill Fee and Late Notice Fee were monetary penalties (or impermissible late fees), Petitioners did not provide any evidence to support that the fees were anything other than collection fees. Accordingly, Petitioners failed to meet their burden that Respondent impermissibly applied monetary penalties against Petitioners.

Complaint Number 4:

The Association and the Board’s pre-legal team threaten the Association’s authority to foreclose the Assessment Lien [Article 6, Section 6.10.5 (ii)] and the Association’s authority to bring legal action to hold an Owner personally liable for delinquent assessment and personally liable for the $30.00 “late notice fees” [Article 6, Section 6.10.5(i)], and threaten the Association’s authority to record a Notice of Lien against Owner’s Lot [Article 6.10.2] when Mr. and Mrs. Finch are not delinquent in their assessment in violation of ARS 33-1807(A) which provides that for the Association to “bring[...] an action at law against the Owner personally obligated to pay the delinquent Assessments [...] (Article 6.10.5 (i)), or “bring[...] an action to 2 foreclose the Assessment Lien against the Lot” (id (ii)), there must exist a cause – “owner has been delinquent in the payment of monies secured by the lien.”

This issue, and Petitioners related arguments, were unclear.

None of the cited provisions address threats of legal action.

Petitioner did not submit evidence regarding a legal action by Respondent, and Respondent’s witnesses stated that no legal action was taken.

Petitioner argued that Respondent could not apply payments pursuant to A.R.S. § 33-1807(K) without a court order. That is a misunderstanding of the statute. Respondent was correct to apply payments pursuant to A.R.S. § 33-1807(K).

Petitioners are responsible for delinquent assessments, late fees, and collection costs.

This complaint item either does not allege actionable conduct or is not yet ripe for resolution. Accordingly, Petitioners failed to meet their burden for this issue.

order

IT IS ORDERED that Respondent be deemed the prevailing party in this matter regarding Petition Issues 1, 2, 3, and 4.

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.

Done this day, February 26, 2025.

/s/ Samuel Fox

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile February 26, 2025 to:

Susan Nicolson, Commissioner

Arizona Department of Real Estate

[email redacted]

[email redacted]

[email redacted]

[email redacted]

[email redacted]

[email redacted]

[email redacted]

First Service Residential

9000 E Pima Center Pkwy, Suite 300

Scottsdale, Arizona 85251

Samantha and Millard C. Finch

[email redacted]

B. Austin Ballio

[email redacted]

By: OAH Staff