OAH-023: stipulation update

Please see the OAH-023 stipulation entry of May 29th for backgrounder.

After further exchanges of letters with the HOA attorney, it appears that the HOA instigated stipulation has caused the HOA to face a no-win situation.  The agreement to raise the walls to the existing heights, splitting costs, cannot be achieved since it would violate the town’s ordinances.  The walls are over the 6-foot limit, the Petitioner has approval and did not misrepresent or mislead anyone, and holds a valid approval, but any request for a new permit would not comply with the height restrictions.  What is the HOA to do? Oh me, oh my!

Well, of course, get the homeowner to reduce his wall so the HOA can get new approvals.  NOT!  Why shouldn’t the HOA pay for any reduction to meet the town’s code since it erred when it signed the stipulation.  It got itself into this problem and now wants to get out of the agreement.  (This brings to mind those criticisms of homeowners with complaints against their HOA who are told, “You just want to get out of an agreement that you now don’t like.”  Well, it works both ways.)

Stay tuned, the HOA plans to get the ALJ to hold the Petitioner responsible for its mistake, aided and abetted by the CAI member HOA attorney Goldschmidt.

Case No.: 07F-H067028-BFS

Complaint:                    homeowner failed to maintain her yard — gazebo;

 Source of Law:             CC&Rs

Discussion:

Holding:

Comments:                   Only issue before the ALJ was that Neighbor complained to HOA about appearance of Plaintiff’s backyard – furniture/gazebo was within setback. HOA then fined Plaintiff for violations.  What was the meaning of “structure” in CC&Rs restrictions on “no structures are permitted”?

Plaintiff failed to subpoena witnesses and HOA objected as hearsay.

Plaintiff cites cases, without naming them, court opinions on how to interpret wording of documents – intention of parties, everyday meaning of words, etc. She inherited home from father and proceeded to fix it up since it was in bad shape.  The neighbor attempted to dictate how Plaintiff was to decorate her property.  Soon, they became not too friendly.

ALJ did not want to hear background “causes”, just the facts about receiving a fine from HOA.  HOA “notice “ failed to provide specifics, the gazebo as cause, to Plaintiff who attempted to clarify what was the problem under the CC&Rs, and how the gazebo was a problem.  HOA decision, citing another part of CC&Rs, was described as “an error” by HOA attorney.

HOA attorney continued to interrupt Plaintiff, yet she, not the judge, repeatedly chastised Plaintiff for speaking too soon and to wait for the judge to speak. Plaintiff threatened with age restriction violations.  HOA is exempted age restricted HOA – must have a resident over 55 – was not part of Petition. 

Carolyn Goldschmidt is the HOA attorney.

  

Case No.: 07F-H067025-BFS

Complaint:

no annual audit; falsified annual reports; failure to provide financial records; others

Source of Law:             Title 10, corporate law; ARS 33-1805; CC&Rs, bylaws

Discussion:

Holding:

Comments:                   Complaint about false financial reports violates title 10, not title 33, Ch 16, and not OAH jurisdiction, but was allowed to be admitted for OAH jurisdiction. 

Typical small HOA run by the directors as a social club, without knowledge or skills to properly run the HOA under their legal requirements and obligations.

Exhibits for annual report with Corporate Commission and corporate records were presented showing different amounts.  HOA responded that an error with an un-reconciled report was the reason for the difference, and the errors were subsequently corrected.

HOA was unresponsive to questions regarding expenditures, and that stated expected expenditures never materialized. HOA did not provide corporate records on request.  Plaintiff could not support HOA requirements to provide un-requested annual reports if not attending the annual meeting.  HOA offered current “practice” and did not reply with governing documents.  Where does the money go? Homeowners get no answers and no records.

As to claim of failing to obtain an annual audit, if required by CC&Rs, Plaintiff stated, “I understand why they don’t do it, too costly.”  HOA stated, “It was common practice not to do it. Small HOAs just do a compilation as common practice.  Too costly to do”  [Is the fairly common wording placed into CC&Rs as a misleading assurance to induce a buyer to purchase the property in the HOA?] 

Plaintiff filed suit in spite of the fact that she did not have current copy of governing documents. A claim of “falsified” requires proof of intentional and deliberate actions by HOA to deceive, and not mere error.