HOA - ALJDEC decisions

25F-H084-REL · Department of Real Estate - H/C · 2026-01-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Virgina Kostman,

Petitioner,

Bella Tierra Community Association,

Respondent.

No. 25F-H084-REL

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: December 30, 2025

APPEARANCES: Petitioner Virginia Kostman appeared on her own behalf. Eric O’Connor, Esq. represented Respondent Bella Tierra Community Association. Sarah Malovich appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE: Administrative Notice taken of the Agency Record that contains exhibits, as well as the CC&Rs provided by Petitioner

FINDINGS OF FACT

Bella Tierra Community Association (“Respondent”) is a planned community association located in Tucson, Arizona.

On or about September 16, 2025, Virginia Kostman (“Petitioner”) filed a petition with the Arizona Department of Real Estate (“Department”) alleging that Respondent had violated its CC&Rs Article 6.9.1. Petitioner paid the required $500.00 filing fee to address the one issue claimed in the petition.

The Notice of Hearing in this matter set forth the issue to be determined as follows:

Petitioner alleges Respondent of violating CC&R 6.9.1 because “I [Virginia Kostman] have paid all quarterly assessments on time to the address specified on every bill, but the Petty family (owner of Platinum Property Management and Agave Management Solutions, agents for KB Homes, which controls Bella Tierra Community Association) returned my payment to my bank without telling me, refused to communicate with me about it for months, and continues to assess late fees on an invalid delinquency fee because they failed to deposit the check, even though I paid them a second time after my bank (not the Pettys) researched the issue, which is a violation of 6.9.1. . .”

Respondent’s CC&Rs Article 6.9.1 sets forth the following:

6.9.1 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 will, unless expressly waived by the Association, 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. 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, provided that such late fee may be imposed only after the Association has provided notice to the Owner that the Assessment or installment of an Assessment is overdue or will be considered overdue if not paid in full within fifteen (15) days after such payment was originally 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.

Homeowners are assessed quarterly by Respondent. The first quarter assessment for 2025 was due January 1, 2025. The billing was issued in December 2024, by Platinum Management, Inc., Respondent’s community management company at that time. The billing issued to the homeowners contained the address for payments to be sent which was the address for Platinum Management, Inc.

However, on December 17, 2024, after the billing for the January 2025 assessments were mailed to homeowners, Platinum Management, Inc. abruptly closed and ceased doing business.

Thereafter, Jaimie Petty, the executive assistant to the owner of Platinum Management, Inc., founded Agave Management Solutions, a community management company that replaced Platinum Management, Inc.

In early January 2025, Agave Management Solutions mailed a notice to the homeowners informing them of an updated mailing address. However, because assessments are due on the first of the month, Petitioner testified that she had already mailed her payment to the Platinum Management, Inc. address, the proper mailing address at the time the payment was due and at the time the payment was made. Petitioner had no reason to believe that Respondent did not or would not receive the payment.

On March 4, 2025, Petitioner received notice from her bank, not Respondent, that her January 2025 payment had been returned to the bank and the check was destroyed, due to it having been sent to an incorrect address (the Platinum Management, Inc. address). The bank notice indicated that the payment was scheduled for January 31, 2025. Respondent acknowledged that payments were considered past due after January 31, 2025, and not before. Consequently, the payment made by Petitioner was considered timely.

On or about March 27, 2025, Respondent sent the second quarter statement to Petitioner that reflected the prior balance for the January 2025 assessment and as well as the current balance due for April 2025.

On April 3, 2025, Petitioner emailed Respondent through its online portal at the email address, agavehoatucson.com, to notify Respondent of the fact that she paid the January 2025 assessment by sending payment “to the address and company name that was on the bill.” Respondent did not respond to Petitioner’s email.

Petitioner attempted to contact Respondent multiple times to clear up the misunderstanding, however, Respondent did not respond.

Respondent assessed a $20.00 late fee to Petitioner, which it has since waived. However, Respondent also assessed two “delinquency fees” totaling $20.00. Respondent’s representative, Sarah Malovich, Chief Financial Officer for Agave Management Solutions, testified that two delinquency fees were assessed to Petitioner in June 2025, because Respondent incurred costs in sending two letters to Petitioner informing her of the late assessment for January 2025. Ms. Malovich testified that Respondent did not begin to collect past due assessments until June 2025, due to the transition in management companies, and that had Petitioner paid the past due amount prior to June 3, 2025, the delinquency fees would not have been assessed. In this case, given the late discovery of the non-receipt of the January 2025 payment and her attempts at investigating why the payment had not been received, Petitioner ultimately paid the January 2025 assessment in July 2025.

Ms. Malovich acknowledged that Respondent did not communicate with Petitioner regarding the lack of receipt of the January 2025 assessment until it appeared on the April 2025 statement. Ms. Malovich testified that Petitioner did not communicate with Respondent until June 2025. Ms. Malovich asserted that Respondent did not receive Petitioner’s April 3, 2025 email because the portal was not yet operational. However, Agave Management Solutions took over for the previous management company in January 2025. It was reasonable for Petitioner to have attempted to communicate via the portal in April 2025, and to assume that she could communicate in such manner given that it was three months after Agave Management Solutions assumed its role.

Petitioner asserted that Respondent was acting in bad faith because Respondent was aware that Petitioner had sent the January 2025 assessment payment to the correct address at the time the payment was made. Petitioner testified that she had no way of knowing that the payment she made for the January 2025 assessment had not been received until her bank notified her in March 2025. Petitioner testified that she has been living in the community since 2021, and has never been late when paying an assessment.

CONCLUSIONS OF LAW

The Department has jurisdiction to hear disputes between a property owner and a planned community association.

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated its CC&Rs Article 6.9.1.

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.”

The Administrative Law Judge concludes, based upon the probative and credible evidence presented at hearing, that Petitioner timely and properly paid the January 2025 assessment to the correct address, and that it was due to the abrupt change in management companies that Respondent did not receive the payment. It was incumbent upon Respondent to ensure that there were no interruptions to the community business. It was Respondent that issued the first quarter assessment for 2025, in December 2024, with the mailing address for Platinum Management, Inc. Petitioner timely paid the assessment and sent it to the address provided by Respondent. The fact that Respondent did not receive the payment was not due to any error or omission on Petitioner’s part. Respondent did not even notify the community members of the change until January 2025.

Accordingly, Petitioner established by a preponderance of the evidence that Respondent committed the alleged violation.

Based on the facts presented, the Administrative Law Judge finds no civil penalty is appropriate in this matter.

ORDER

IT IS ORDERED that Petitioner’s petition is affirmed.

IT IS FURTHER ORDERED that Respondent reimburse Petitioner the $500.00 filing fee.

IT IS FURTHER ORDERED that Respondent remove the delinquency fees from Petitioner’s account.

IT IS FURTHER ORDERED Respondent is directed to comply with the requirements of CC&Rs Article 6.9.1 going forward.

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, January 9, 2026.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile January 9, 2026, to:

Susan Nicolson, Commissioner

Arizona Department of Real Estate

[email redacted]

Eric P. O’Connor

GORDON REES SCULLY MANSUKHANI, LLP

[email redacted]

Virginia Kostman

[email redacted]

Bella Tierra Community Association

[email redacted]

Sara Malovich

CFO Agave Management

[email redacted]

By: OAH Staff