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Notwithstanding Meaning and ADRE Complaints

Some A.R.S. statutes related to planed communities begin with “Notwithstanding any provision.” What does this mean as it relates to whether a planned community’s documents apply or whether the A.R.S. statute supersedes the planned community’s documents?

Secondly, if a member of an HOA bring a complaint against their HOA to the Arizona Department of Real Estate and prevails, does the plaintiff also prevail in getting their $500 filing fee paid for by the losing party, the HOA? What kind of penalties to these administrative law judges place on HOA’s that are found not to abide by their own CC&Rs or for not following A.R.S. relating to planned communities?

3 Responses

  1. Dennis Legere

    Basically everywhere in statute where the word “notwithstanding” means that that provision takes precedent over and supersede the referenced document. For example “notwithstanding any provision to the contrary in the community documents” means that the section of law following that statement takes precedent over and supersedes any contrary provision in the community document.
    The opposite position would be “unless otherwise specified in the community document” with this language the community documents take precedent over the state statute provision.

    I will add that under property servitude’s law any provision in the community documents that is contrary to state law must be removed from the governing documents, because a covenant that is illegal cannot remain as a restriction on the free use of the land. Each and every board is empowered to unilaterally change the governing documents even the CC&R’s without member involvement to comply with the law , yet I’ve never seen one do that.

    Relative to the ADRE and ALJ dispute resolution process, if the petitioner prevails and wins his case the respondent must pay the petitioner the $500/issue that he paid to file the petition. I will note that it is $500 per issue with up to 4 issues per petition. So if the petitioner has 4 issues it will cost him $2,000 to file and then each issue is decided separately. If he prevails on all 4 issue he will be paid back the full $2,000.

    Fines are rarely applied and for the most part have averaged about $500 per issue. Up until about a year ago my case against my association resulted in the largest fine ever placed on an association by an administrative law judge and that was $2,000. I will note that i had asked the judge to fine the association $500 for every time that they violated the law in the last year and that would have resulted in about $23,000 in fines. Last year one case was heard that resulted in a fine to the association of $5,000 and that still stands as the largest fine awarded for a HOA related case.

    Hopefully this answers your questions. If not feel free to ask more.

    Thanks
    Dennis

  2. Nick

    Dennis,

    Thank you for your comprehensive reply. Perhaps if fines were higher, HOA’s it would lead to less rogue HOAs.

    I have a question about A.R.S 33-1812, specifically A7 “Ballots, envelopes, and related materials, including sign-in sheets if used, shall be retained in electronic or paper format and made available for member inspection for at least one year after completion of the election.”

    Instead of physically going to inspect the ballots, does this statute permit the HOA Secretary or Management company to send a homeowner a .PDF copy by email of the completed ballots at no charge or to copy the completed ballots for the homeowner at no more than $0.15 per page? Trying to memorize how 100 people voted in a previous election sitting in a chair at an office is a daunting task.

  3. Dennis Legere

    Nick;
    Unfortunately the law provides for a minimum requirement, that any record can be viewed upon request, and the association cannot deny you access to those records. While access to community documents is the single largest complaint in any petition to the ADRE, it is a very simple task. You can request a copy of the records and the association cannot charge you more than $0.15/page.

    Specifically to your question the statute does not require the association or it’s manager to do anything more than provide you access. It however does not prevent them from doing do if they desire.

    What i have found is that if the association keeps the record electronically that they may simply find it easier to also provide you an electronic copy of that records, simply by asking. While they do not have to provide you that record electronically it is much easier than printing them out and then making a conference room available for you to view them and having someone sit with you while you do that. The better the relationship and the more reasonable the request the better the response will be by the association.

    I actually had a manager testify at an administrative law judge hearing that she would have gladly simply sent the requested records electronically if she had been asked but instead got busy and did not have the records available within the 10 business days required by law. The judge did not buy the response because the manager could simply have provided the records electronically if she wanted too rather than failing to comply with the law.

    Another trick I’ve used and have recommended to other is if the association wont just send you an electronic copy of the record, set up an appointment to view the record and take pictures of them on your phone for detailed review later.
    I cannot tell you how many times homeowners have asked for records and had no idea how to review them when they got them. Do not expect the association or the management company to explain to you what the records say, especially financial records. Go to a record viewing with a plan and specific issues that you are looking for.

    Effective review of records can be a science, that is best approached systematically. Do not ask for more than you can reasonable review in 45 minutes to an hour. Start at a high level and gradually work down to greater detail if the high level review indicates something unusual, with more specific and detailed types of records. If you start with detailed records you will be lost after the first five minutes and never be able to see the trees from the forest. That why I always suggest they you start high and look for smoke then zoom in closer to find the fire.

    Hopefully this helped you and any other homeowner viewing this post.

    Dennis

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