HOA - ALJDEC decisions

25F-H116-REL · Department of Real Estate - H/C · 2026-03-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

Aracelys M Morel,

Petitioner,

Northwood Park Homeowners Association,

Respondent.

No. 25F-H116-REL

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: February 20, 2026 at 1:00pm

APPEARANCES: Petitioner Aracelys Morel appeared on her own behalf. Attorneys Neil Berglund and Jeffrey McLerran of Freeman Mathis & Gary, LLP represented Respondent Northwood Park Homeowners Association with observer Lynn Sharp. Spanish Interpreter Luigui Melenciano with Language Connect

ADMINISTRATIVE LAW JUDGE: Nicole Robinson

EXHIBITS ADMITTED INTO EVIDENCE: Arizona Department of Real Estate Packet (“Packet”) Exhibits 1 through 22. Petitioner’s Exhibits C through I and L through O.

FINDINGS OF FACT

Background and Procedure

The Arizona Department of Real Estate (“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 November 27, 2025, Aracelys M. Morel (“Petitioner”) filed a one issue petition with the Department which alleged that Northwood Park Homeowners Association (“Respondent”) violated Ariz. Rev. Stat. § 33-1806.01.

The relief requested by Petitioner, other than ordering Respondent to pay to Petitioner the filing fee required by Ariz. Rev. Stat. § 32-2199.01 if Petitioner prevailed, includes the following: Order Respondent to abide by the Arizona statute specified in the complaint section and Order Respondent to abide by the section(s) of the condominium/planned community document(s) specified.

On December 16, 2025, the Department sent a Homeowner’s Association (“HOA”) Notice of Petition to Respondent which informed Respondent of the petition initiated against it. In addition, the petition informed Respondent to send a timely response to the Department and to Petitioner no later than January 5, 2026.

On or about December 31, 2025, Respondent returned its Answer to the Department whereby it denied Petitioner’s claims.

On or about January 7, 2026, the Department referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing to address the issues set forth as follows:

The Petitioner’s allegation within the petition states, “The Association is misinterpreting and enforcing A.R.S. § 33-1806.01 by classifying short-term Airbnb guests as “tenants” and charging a $25 administrative fee for each stay. The governing documents do not authorize this fee and do not clearly regulate short-term rentals. The property is also used for personal residential purposes. The Association has issued multiple compliance notices without evidence of occupancy and continues to threaten enforcement despite the owner being fully current on all Association dues. The petitioner is seeking an official determination on whether this interpretation of the statute is legally correct.”

The Parties and Governing Law

Respondent is a planned community association whose members own properties in the Northwood Park residential real estate development located in Mesa, Maricopa County, Arizona. The community is managed by Thrive Community Management, LLC.

Petitioner is a property owner, has owned her townhouse for approximately six years, and is a member of the Association. Petitioner’s townhouse has two bedrooms and has about 1,125 square feet. Petitioner last lived at the townhouse in November 2024 and began to Airbnb the unit. On occasion, Petitioner would also host family and friends at the unit. Currently, Petitioner lives in a different unit in the community.

The governing law Ariz. Rev. Stat. § 33-1806.01, Rental property; member and agent information; fee disclosure provides, as follows:

33-1806.01. Rental property; member and agent information; fee; disclosure

A. A member may use the member's property as a rental property unless prohibited in the declaration and shall use it in accordance with the declaration's rental time period restrictions.

B. A member may designate in writing a third party to act as the member's agent with respect to all association matters relating to the rental property, except for voting in association elections and serving on the board of directors. The member shall sign the written designation and shall provide a copy of the written designation to the association. On delivery of the written designation, the association is authorized to conduct all association business relating to the member's rental property through the designated agent. Any notice given by the association to a member's designated agent on any matter relating to the member's rental property constitutes notice to the member.

C. Notwithstanding any provision in the community documents, on rental of a member's property an association shall not require a member or a member's agent to disclose any information regarding a tenant other than the name and contact information for any adults occupying the property, the time period of the lease, including the beginning and ending dates of the tenancy, and a description and the license plate numbers of the tenants' vehicles. If the planned community is an age restricted community, the member, the member's agent or the tenant shall show a government issued identification that bears a photograph and that confirms that the tenant meets the community's age restrictions or requirements.

D. On request of an association or its managing agent for the disclosures prescribed in subsection C of this section, the managing agent or, if there is no managing agent, the association may charge a fee of not more than twenty-five dollars, which shall be paid within fifteen days after the postmarked request. The fee may be charged for each new tenancy for that property but may not be charged for a renewal of a lease. Except for the fee permitted by this subsection and fees related to the use of recreational facilities, the association or its managing agent shall not assess, levy or charge a fee or fine or otherwise impose a requirement on a member's rental property any differently than on an owner-occupied property in the association.

E. Notwithstanding any provision in the community documents, the association is prohibited from doing any of the following:

1. Requiring a member to provide the association with a copy of the tenant's rental application, credit report, lease agreement or rental contract or other personal information except as prescribed by this section. This paragraph does not prohibit the association from acquiring a credit report on a person in an attempt to collect a debt.

2. Requiring the tenant to sign a waiver or other document limiting the tenant's due process rights as a condition of the tenant's occupancy of the rental property.

3. Prohibiting or otherwise restricting a member from serving on the board of directors based on the member's not being an occupant of the property.

4. Imposing on a member or managing agent any fee, assessment, penalty or other charge in an amount greater than fifteen dollars for incomplete or late information regarding the information requested pursuant to subsection C of this section.

F. Any attempt by an association to exceed the fee, assessment, penalty or other charge authorized by subsection D or E of this section voids the fee, assessment, penalty or other charge authorized by subsection D or E of this section. This section does not prevent an association from complying with the housing for older persons act of 1995 (P.L. 104–76; 109 Stat. 787).

On September 8, 2025, Petitioner received a Courtesy Notice from Respondent that stated in pertinent part, as follows:

During a recent community inspection, September 8, 2025 the following violation was noted on your property:

Title: Use – Tenant Information

Description: As your residence has an offsite address, we believe it may be occupied by a tenant.

CC&R Reference: Ariz. Rev. Stat. § 33-1806.01(c)

Resolution: In accordance with Ariz. Rev. Stat. § 33-1806.01(c), please provide the names and contact information for all adult tenants occupying the property, the time period of the lease including the beginning & end dates of the tenancy, and a description of and the license plate number for all tenant’s vehicles.

Please be aware that the next occurrence or continuation of this violation will result in fines being levied against your account in accordance with your community's Fine Policy. The Association is hopeful the situation can be remedied without imposing additional fines or instituting legal action. We hereby request that you resolve this situation before the follow-up inspection that will be conducted within 21 days. You have the right to appeal this penalty in person, or by submitting a written appeal to the Board of Directors...Please contact the Community Compliance Department...if you wish to be placed on the Agenda for a hearing at the next Board of Directors meeting.

Petitioner appealed the notices to the HOA. On September 15, 2025, Respondent replied and sent an email to Petitioner which stated as follows:

Hi there,

Thank you for reaching out about this.

The specific AZ state statute that is being referred to is the one on the violation letter you received.

If you would like more information on it you can google the statue that has been provided and read the law.

In addition, I have attached the form that must be filled out for your tenants.

Please let me know if you have any questions or if I can be of further assistance.

Thank you and have a great day!

Petitioner continued to receive notices from the HOA which led to the filing of the Petition with the Department. Petitioner has not been charged nor paid Respondent any $25.00 or $15.00 fee.

The hearing was conducted on February 20, 2026.

Petitioner testified on her own behalf. Respondent counsel provided an open and closing statement but did not present any testimony. Administrative notice was taken of the Department’s electronic file and Notice of Hearing.

Hearing Evidence

Petitioner argued that Respondent may not impose a repetitive per-stay $25.00 tenant registration fee for each short-term Airbnb guest when the Respondent’s Covenants, Conditions, and Restrictions (CC&Rs) do not state this requirement. Petitioner argued that Respondent could not point to any CC&R provision to authorize a $25.00 fee and that each short-term stay should not constitute a separate lease obligation. Petitioner does not believe that her Airbnb guests that go through the Airbnb reservation system are “tenants,” and there are no “leases,” in these transactions.

Respondent argued that the plain language of Ariz. Rev. Stat. § 33-1806.01(D) allows the Association to charge Petitioner for each separate Airbnb tenant. Respondent argued that although the definition of “tenant” is not defined in that part of the Statute, the Arizona Landlord Tenant Act defined “tenant” as “a person entitled under a rental agreement to occupy a dwelling unit to the exclusion of others.” Respondent further argued that the definition of tenant does not limit a tenancy to a certain period of time. Respondent asserted that Airbnb guests are tenants because the guest rents the property from another for a certain duration, and they have exclusive control of the property during their Airbnb stay, whether the stay was for one year or one day.

Conclusions of Law

The Department’s jurisdiction pursuant to Ariz. Rev. Stat. §§ 32-2102 and 32-2199 et seq., regarding a dispute between an owner and a planned community association. The owner or association may petition the department for a hearing concerning violation 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(A), 32-2199.01(D), 32-2199.02, and 41-1092 et seq., OAH has the authority to hear and decide the contested case at bar. OAH has the authority to interpret the contract between the parties.

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated the aforementioned Ariz. Rev. Stat. § 33-1806.01.

A preponderance of the evidence means “proof which leads the [trier of fact] to find that the existence of the contested fact is more probable than its nonexistence.”

Under the Arizona Residential Landlord and Tenant Act, Ariz. Rev. Stat. § 33-1310 defines these terms as follows:

13. “Rental Agreement” means all agreements, written, oral or implied by law, and valid rules and regulations adopted under section 33-1342 embodying the terms and conditions concerning the use and occupancy of a dwelling unit and premises.

. . . .

17. “Tenant” means a person entitled under a rental agreement to occupy a dwelling unit to the exclusion of others.

. . . .

The HOA expressly allows owners to operate short-term rentals in its community and are tasked with keeping the community safe and clean. How sustainable would it be for every short-term operator within the community to provide a tenant information sheet for every Airbnb guest, may be a question for a future agenda item at an HOA meeting. However, in this case, there are no HOA CC&Rs that speak to this matter, as such, Arizona statute is the guiding authority. Petitioner has not provided any persuasive policy or documents from Airbnb, in this matter. In fact, Petitioner provided that she was legally registered as a short-term rental operator with the State of Arizona, however, no evidence regarding this relationship was provided to the Tribunal. Hence, the definitions of “rental agreement” and “tenant” provided in Ariz. Rev. Stat. § 33-1310, clearly define the Airbnb guests, especially, because the Arizona law speaks to no durational requirement.

Accordingly, the Association was permitted to charge Petitioner $25.00 for each new tenancy/Airbnb guest stay pursuant to Ariz. Rev. Stat. § 33-1806.01.

Therefore, the undersigned Administrative Law Judge concludes that because Petitioner failed to meet her burden of proof that Respondent committed the alleged violation, her petition must be denied.

ORDER

Based on the foregoing,

It is Ordered that Petitioner’s petition 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. § 32-199.01.

NOTICE

Pursuant to Ariz. Rev. Stat. §32-2199.02(B), this Order is binding on the parties unless a rehearing is granted pursuant to Ariz. Rev. Stat. § 32-2199.04. Pursuant to Ariz. Rev. Stat. § 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, March 26, 2026.

/s/ Nicole Robinson

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile March 26, 2026 to:

Susan Nicolson, Commissioner

Arizona Department of Real Estate

100 N. 15th Avenue, Suite 201

Phoenix, Arizona 85007

[email redacted]

Freeman Mathis & Gary, LLP

6720 N. Scottsdale Rd, Ste 310

Scottsdale, AZ 85253

[email redacted]

Aracelys M Morel

222 W. Brown Rd.101

Mesa, AZ 85201

[email redacted]

By: OAH Staff