HOA - ALJDEC decisions

25F-H054-REL · Department of Real Estate - H/C · 2025-08-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jeremy R. Whittaker

Petitioner

The Val Vista Lakes Community Association

Respondent

No. 25F-H045-REL

25F-H054-REL

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 15, 2025, with the record held open until July 24, 2025 for submission of written closing arguments.

APPEARANCES: Petitioner Jeremy R. Whittaker appeared on his own behalf. Joshua M. Bolen, Esq. appeared on behalf of Respondent The Val Vista Lakes Community Association.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

EXHIBITS ADMITTED INTO EVIDENCE: Petitioner’s Exhibits 1-21 and Respondent’s Exhibits 1-16 were admitted into evidence.

_____________________________________________________________________

FINDINGS OF FACT

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.

Petitioner filed two single-issue petitions against The Val Vista Lakes Community Association (Val Vista), with the Department. Petitioner tendered $500.00 to the Department with each petition.

Val Vista timely responded to each petition, and the Department referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. For the sake of judicial economy, the tribunal consolidated the matters.

Respondent is a homeowners’ association whose members own properties in a residential real estate development located in Maricopa County, Arizona.

Petitioners are property owners and member of Val Vista.

TFE is governed by its Covenants, Conditions, and Restrictions (“CC&Rs”), and overseen by a Board of Directors (“the Board”). The Association is also regulated by Title 33, Chapter 16, Article 1 of the Arizona Revised Statutes (“Ariz. Rev. Stat.”)

25F-H045-REL

On May 8, 2025, the Department issued a Notice of Hearing in this case, with the following dispute:

Petitioner alleges Respondent of violating, “A.R.S. § 33-1805 by failing to provide the requested records with the ten-business-day statutory deadline, conditioning production on a legally unenforceable ‘Records Request Form’, and withholding critical attorney fee information-particularly troubling given its counsel’s documented disciplinary history for inflated or misleading HOA fee practices.

On February 27, 2025, Petitioner requested that Val Vista produce the following items:

1. Final, Fully Executed Records Retention and Request Policy

○ Provide the exact version adopted by the Board on or about February 25, 2025, including any exhibits, attachments, or attorney commentaries formally incorporated into the policy.

2. Relevant Meeting Minutes (Draft or Final)

○ Any minutes or draft minutes from the February 25, 2025, Board meeting that reflect the discussion, modification, or adoption of this “Records Retention and Request Policy.”

3. Any Related Correspondence

○ If available, please include any Board memos, explanatory documents, or other communications discussing the rationale for or scope of the adopted policy.

Also on that same day, Petitioner requested that Val Vista produce the following items:

Current and Past Legal Services Agreements

○ Final, fully executed retainer or engagement agreements with any law firm or individual attorney who has represented or is currently representing the Association.

○ Any amendments, extensions, or addenda to such agreements.

2. Attorney Rate Schedules and Fee Structures

○ Any rate sheets, fee schedules, billing guidelines, or other formal documents outlining how legal services are charged to the Association.

○ Copies of any contract exhibits or schedules addressing standard hourly rates, flat fees, contingencies, or other compensation arrangements.

3. Invoices, Billing Statements, and Payment Records

○ All invoices or statements submitted by the attorney or law firm for legal services rendered(with legally permitted redactions).

○ Documentation of payments made by the Association to the attorney or law firm.

4. Meeting Minutes or Board Resolutions Discussing Attorney Engagement

○ Minutes (draft or final) from any Board or committee meetings where attorney contracts, legal representation, or the continuation of attorney services were discussed.

○ Any resolutions approving retention of legal counsel or specifying scope of services.

5. Selection Process and Related Correspondence

○ RFPs (Requests for Proposal) or bid solicitations (if any) related to retaining legal counsel.

○ Correspondence among Board members, management, or committees that discuss the selection or evaluation of legal counsel, including but not limited to emails, memoranda, or letters.

6. Conflict-of-Interest Disclosures or Waivers

○ Any declarations, disclosures, or waivers pertaining to potential conflicts of interest concerning the attorney or law firm prior to this law firm being retained.

7. Policies, Guidance Documents, or Additional Records Governing Legal Representation

○ Internal policies, guidelines, or explanatory documents that define or clarify the Association’s relationship with its legal counsel.

○ Any official communications or directives issued by legal counsel to the Board or the management staff in relation to the contractual arrangement.

8. All Other Relevant Records

○ Any other written or electronic records that detail or impact the contractual or advisory relationship between the HOA and its attorney(s).

No documents have been turned over by Val Vista.

25F-H054-REL

On June 3, 2025, the Department issued a Notice of Hearing in this case, with the following dispute:

Petitioner alleges Respondent of violating, A.R.S. § 33-1805(A), ‘by failing to provide the requested bank statements and FSR-related communications, and is operating in ongoing breach or its statutory obligations.’

On March 21, 2025, Petitioner requested that Val Vista produce the following items:

1. Operating Bank Statements (January 2024 – Present)

○ Monthly Statements for Any Operating/Checking Accounts

Please provide complete copies of the original bank statements from each financial institution maintaining the Association’s operating or checking accounts, covering the period from January 1, 2024, through the most recently available statement date in 2025.

○ Verification of Issuing Financial Institution

These should be official statements as issued by the bank(s). If additional transaction details are needed for clarity, please also provide any accompanying pages or enclosures that were part of the bank’s original statement.

2. Reserve Account Statements (January 2024 – Present)

○ Monthly or Quarterly Statements

Please provide official copies of all reserve-account statements from the relevant financial institution(s), covering the period from January 1, 2024, through the present.

○ Verification of Issuing Financial Institution

These statements should be the original or exact copies of what the institution produced, reflecting the account number(s), balance(s), and any earned interest to verify their authenticity.

Val Vista failed to respond to this request.

Arguments:

Petitioner argued in the first petition, that Val Vista failed to produce the requested records within the statutory timeline, and/or otherwise respond to his request with further clarification and the like. As to the second request, Petitioner argued that not only did Val Vista fail to produce the requested records within the statutory timeline, it also had no authority to make him complete the records request on a specific form, and ignore the request without submission of the form. Petitioner argued that it should be reimbursed its filing fees and that a civil penalty should be awarded.

Val Vista argued that A.R.S. §33-1805 was outdated and misunderstood. It argued that only after an examination of records would it have 10 days to provide copies. Further because of previously broad requests for documents by members of the Association, Val Vista created a Records Policy in an attempt to streamline the process. Val Vista also argued that some of the records requested by Petitioner were privileged or otherwise expressly excluded by statute.

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 Ariz. Rev. Stat. § 33-1805.

“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.”

A.R.S. § 33-1805(A) provides in pertinent part:

Except as provided in subsection B of this section, all financial and other records of the association shall be made reasonably available for examination by any member or any person designated by the member in writing as the member's representative. The association shall not charge a member or any person designated by the member in writing for making material available for review. The association shall have ten business days to fulfill a request for examination. On request for purchase of copies of records by any member or any person designated by the member in writing as the member's representative, the association shall have ten business days to provide copies of the requested records. An association may charge a fee for making copies of not more than fifteen cents per page.

The tribunal finds that Val Vista wrongfully withheld the requested documents. If there were documents which were privileged and/or contained sensitive date they could have properly been withheld and/or redacted. This conclusion applies to both requests. The fact that the second request was not made on the form, does not excuse Val Vista from at a minimum responding. However, the tribunal finds that Petitioner complied with the statute as his request was in writing, and if Val Vista needed clarification on what was to be requested it should have reached out to Petitioner, rather than ignoring him. Likewise, if Val Vista determined the total cost and informed Petitioner of the same and Petitioner did not pay the fee that could be a valid justification for failing to provide the documents. No response by Val Vista was simply unacceptable, and in violation of the statute.

ORDER

IT IS ORDERED that Petitioner’s petition in 25F-H045-REL be granted and that Respondent shall follow the A.R.S. § 33-1805(A). IT IS FURTHER ORDERED, that Respondent shall reimburse Petitioner’s $500.00 filing fee as required by Ariz. Rev. Stat. § 32-2199.01. IT IS FURTHER ORDERED that a civil penalty is awarded in the amount of $500.00.

IT IS ORDERED that Petitioner’s petition in 25F-H054-REL be granted and that Respondent shall follow A.R.S. § 33-1805(A). IT IS FURTHER ORDERED, that Respondent shall reimburse Petitioner’s $500.00 filing fee as required by Ariz. Rev. Stat. § 32-2199.01. IT IS FURTHER ORDERED that a civil penalty is awarded in the amount of $500.00.

/ / /

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, August 8, 2025.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile August 8, 2025 to:

Susan Nicolson

Commissioner

Arizona Department of Real Estate

Attn:

[email redacted]

Josh Bolen

CHDB Law LLP

[email redacted]

Jeremy Whittaker

[email redacted]

By: OAH Staff