Answers from AZ DFBLS on HOA constitutionality

I met with DFBLS Director Barger, and his staff — Deputy Director John Stahmer (an attorney), Beth Soliere and Debra Blake — along with Ass’t AG Camila Alacon for about 45 minutes this morning.

 

In short –

 

1.  Approval was withdrawn because of money shortages, and that Judge Downey had ruled that DFBLS doesn’t regulate HOAs.  Furthermore, Mr. Barger believed that they “would not win.” an appeal.  The AAG added that the AG cannot act independently and must be requested to act by the agency.

 

A discussion followed regarding Judge Downey’s bias that DFBLS doesn’t regulate HOAs.  I countered with the fact that the two precedents used by Downey ignored other pertinent elements of these decisions. From her decision:

 

“The legislature may have had valid policy reasons for devising a different system for resolving homeowner association disputes. But it appears that the Department of Fire, Building and Life Safety is a mere figurehead or ‘parking lot’ for those disputes”,

 

I also argued that justice was not done by Downey nor by the refusal to appeal the decision.  There are ample grounds for an appeal, since the AG’s office had already argued in favor of constitutionality.  This was a question of justice for homeowners living in HOAs.

 

 

2.  DFBLS is still hearing complaints, and will file a correction with the AZ Republic article that told the public otherwise.  No answer was given regarding the number of any constitutionality appeals based on the Downey decision.  As for a return of fees to Ms Waugaman, or the status or prior OAH decisions, and any future confusion, there was no meaningful answer.  What is is what is, and what happened happened.

 

3.  With respect to the AG’s office, I pointed out the repeated replies for help by homeowners to Terry Goddard, the AG, resulted in a statement that he  he could do nothing and to get new legislation.  Yet, the OAH legislation exists and the AG will not assist homeowners in their quest for justice.   I pointed out that the AG’s webpage, under Consumer Protection, included AG investigsation to consumer misrepresentation and fraud with regard to real property (“Merchandise may include any objects, wares, goods, commodities, intangibles, real estate or services“), yet the AG does nothing in regard to HOA fraud. 

 

I pointed out that the Real Estate Department has refused to enforce its own Rules and Regulations with respect to disclosing material information (“R4-28-1101. B. A licensee participating in a real estate transaction shall disclose in writing to all other parties any information the licensee possesses that materially or adversely affects the consideration to be paid by any party to the transaction . . . .”).

 

4.  The Director, and staff, said that they would adopt a more homeowner friendly website to help petitioner’s understand the process.  That the question of fees was beyond its control in that it must be self-paying.  I pointed out the injustices of the current process and legislation, and how CAI/HOA attorneys were using it to deny homeowner justice.  I asked DFBLS to do what it could to bring these inequities to the attention of the legislators, within their agency restrictions. They said that they are not against homeowners.

 

 

Ladies and gentlemen, new legislation is needed to fix the weaknesses of the current OAH law:

 

1.   Include the Restatement Third, Property: Services that governs HOAs in addition to Title 33.

 

2.   Clarify the priority of Title 33 over Title 10 in areas of conflict.

 

3.   Adopt last year’s SB 1162 and its restrictions to level the litigation playing field.

 

4.  HOAs should be made accountable for for monies as are real estate firms and escrow companies, with state agency recordkeeping and reporting requirements, and surprise state audits.

 

5.  Enforceable laws against violations of the governing documents and state laws by HOA boards, with meaningful fines and “disbarment” of offending directors. (When the members must fork up assessments to pay for board wrong-doing, then they will take charge of their HOAs).

6.  And correct the constitutionality issue for OAH adjudication!

 

WRITE YOUR LEGISLATOR TODAY!!!!