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  • From Kevin Conde on Need guidance about HOA Board of Director rules

    thank you Dennis. That’s what i’m looking for, and I have some research to do.

    Go to comment
    2020/08/01 at 5:31 pm
  • From dennisl on Need guidance about HOA Board of Director rules

    Kevin,

    I’ve tried to base most of my work in the HOA arena on the fundamental principles of Property Servitudes Common law as stated and defined in the Restatement of Law third Property Servitudes issued in 2000 by the American Law Institute. That restatement dedicates chapter 6 and most of volume 2 to Common Interest Communities. In sections 6.13 and 6.14 it establishes that the business judgement rule applicable to most corporations does not apply to these communities and instead defined the duties of a board to the members of the community and the duties of the board to the association within those identified subsections.
    Those definitions became case law for Arizona in Tierra Rancho v Kirtchikov. You can find that decision under our resources and tools tab and HOA case law.

    The board has the absolute authority for decisions relative to common area because that common area actually is the property of the association. But that does not mean that it has to make those decisions in a vacuum and without input from the community.

    Let’s talk about your tree. Because an individual complained about a tree does not mean that it has to be removed. You have to appreciate the inherent beauty and benefit to the community of a mature tree and how long that tree took to grow to its existing size. Any tree has inherent value to a community that cannot be lost to a complaint by one homeowner of the droppings from that tree. Like I said earlier you can never make everyone happy with any decision that you make for the community. So don’t even try.

    As for liability because someone has complained, that fact alone has absolutely no relevance to your decision. The complaint was not about safety but rather about leaves dropping in his pool. Having said all of this in my opinion the only reason why any tree should be removed is because of real and eminent threat to the safety of residents. Because a branch could fall some time in the future is not a reason to remove a tree, if it was every HOA would be wise to remove all trees from their property making them barren waysides absent of any shade from the Arizona sun. Why would this be in the best interest of the community? One of the purposes of HOA’s in the first place is to protect the property value of the homes in that community. What would be more attractive to you as a home buyer a community of homes with abundant mature shade trees, or one without any trees at all. Your answer to that question will tell you how you should approach decisions about removing a tree to the property values of the homes in your community.

    If a branch is weakened and poses a threat to anyone remove the branch but save the tree. This is simply common sense that no court would ever question. As a board member you have an absolute right and duty to independent decision making. You do not have to follow the lead of anyone other than your own conscience. That is why boards are always made up of an odd number of members so that stalemates do not happen. Having only two members is a disservice to your community and should be remedied at the earliest opportunity. I would also bet that it is a requirement of your bylaws. Under no circumstances should an HOA board consist of only one member, especially if that member see’s himself or herself as the all powerful deity for the community.

    Dennis

    Go to comment
    2020/08/01 at 3:26 pm
  • From Kevin Conde on Need guidance about HOA Board of Director rules

    Dennis:

    Thank you for your reply I was purposely vague when I was describing my problem, as I didn’t want to sound like I had an ax to grind. I’m honestly asking for input, and hope that you can give me some examples of case law or other things like that for me keep in preparation for future issues.

    Some background. The other board member has been on the board for more than 10 years. For the majority of that time she was the only board member. I would guess that even when there were other board members, she was the one that was effectively in charge.

    The Association is well-run, financially in the black, and there are no major complaints about the maintenance or upkeep of the Association’s common areas. The only complaint I have gotten from members is a tendency for the board to not communicate to the members.

    The feeling I’ve gotten from the other board member and the Association manager is the less we talk to the members the better. This is not been said to me in so many words. The impression I get is that the other board member and the management Association feel that soliciting comments from the community will only cause dissension.

    This all came to head because of a tree. A homeowner who borders on the common green space wants a weeping acacia tree removed because it dumps too much junk into his pool. From the very beginning I said that if the tree is a danger, or diseased, then there is no reason to communicate with the rest of the Association, the tree comes down. However, if the tree is healthy, we should not remove it without at least informing the Association that we intend to do so.

    My inclination has always been to remove the tree unless there is a compelling reason not to. Removing it, and replacing it with a new young tree, removes any possibility of litigation against the Association should a weather event because that tree to fall and damage the homeowner’s property. It’s one of those things that once the homeowner has told us that he has a problem with the tree, if we don’t remove, it and the worst happens, were going to end up being held liable.

    I honestly don’t know why this is turned out to be such a big deal. The other board member actually gave me a print out of the CCR’s, which I already have, saying that the board has absolute authority to make all decisions regarding landscaping in the common areas, and this meant we could do whatever we wanted to do whenever we wanted to do it, we being the board.

    Included in that handout was a further part of the same paragraph that says the board is the sole authority to make decisions about things in the common area. She told me that meant I had to do what I was told to do. Imagine my surprise, I told her what it meant was that I was a board member and my opinion mattered, and since there were only two of us on the board, if we could not agree that nothing would happen.

    As mentioned in my original question, she also tried to convince me that somehow the CCR’s prevent me from communicating with members of the Association without board approval, and I could not provide my email address and phone number in any emails I send to Association members. I’ve asked her in writing to provide the legal source of that assertion.

    That all was a moot argument. When I went and looked at tree, it was obvious the tree to had come down. It had significant rot in a 12-inch section of the first of two main branches. All along I said if the tree is a danger, if comes down.

    I don’t think this is going to go away, so I’m hoping to find caselaw citations, or other source material of a legal nature regarding what my responsibilities are towards communicating to my Association members, and what could possibly make anyone think I don’t have a legal right to do that.

    Go to comment
    2020/08/01 at 12:34 pm
  • From dennisl on Need guidance about HOA Board of Director rules

    Kevin
    One more thing. You cannot divulge any confidential information about discussions in legitimate executive sessions (see ARS 33-1804) or about any specific individual to anyone else. But for everything else you are free to discuss community issues with any community member at at any time.
    Dennis

    Go to comment
    2020/08/01 at 9:57 am
  • From dennisl on Need guidance about HOA Board of Director rules

    Kevin,
    The other board member and your community manager are full of crap. There is no nicer way to say that. While it is true the the board is the sole authority for any decision. Relative to the common property and any other authority given to you by the CC& R’s and the bylaws. It is totally arrogant and dictatorial to believe that you can do that in a vacuum Without seeking community involvement or input. If it is your desire and power fetish to run your community as a dictatorship than you can but the community will resent you and become a nightmare to live in. If however you want to run a community it’s that is a great place to live in, where people feel safe and respected and free to live their lives and enjoy their home and their community then be transparent and open and inclusive in your management of the community it’s. Seek input into all important decisions, treat people with respect and fairly and you will be treated with respect in return. While the ultimate decision is the boards and you must remember that decision may not make some people happy, that is not your job. Your job is to act in the best interest of the community as a whole .

    You are absolutely right in your beliefs and understanding of what you should do and how you should act as a board member. I assure you there is no law that prevents any board member from communicating with any homeowner in his/her community. In fact the whole reason that we have open meeting laws for these communities and not for normal corporations is because of the need for openness and transparency in the conduct of business in these common interest communities.
    An interesting point you made in your note was that there were only two board members on your board, which is unusual but you realize that no decision can be made by your board without your approval. The community manager does not count. So the long time board member has no authority to do anything without your approval. I’m assuming that your bylaws call for three board members but one has resigned. You do realize that the board can appoint a replacement to fill the remaining term of the open board seat , without a vote of the community. You would have to do it in an open meeting that was properly noticed to the community.

    The problem with many community boards in Arizona is that they get advice from community managers who for the most part are uninformed and from association attorneys who will tell you what you can do and what you can get away with and never what you should do for the best interest of your community. They want you to run your community like a faceless and heartless corporation instead of a community where people live and raise their families.
    It is well beyond time when we stand up against the HOA industry and take back our communities to be run they way they should be run and not as simple money machines for the HOA Industry.
    I apologize for the length of this letter but board members like you are why I do what I do. If we had more of you we would not need more laws at the state level to counter the money hungry HOA industry and the board tyrants focused only on power over other people.
    Please if you need any help in running your community please do not hesitate to ask. I will be there for you.

    Dennis

    Go to comment
    2020/08/01 at 9:52 am
  • From dennisl on New Community Management Company Needed

    Richard,

    Let me first congratulate you and your board for taking ownership of the fact that the management company works for you and not the other way around. If they do not perform to your expectations fire them. There are hundreds of companies out there and from all my encounters with most of them there is not one that I would recommend to anyone. It starts with the executive his or her personality and belief will be reflected in every one of the individual community manager. My general recommendation is stay away from any company that is part of AACM Arizona Association of community managers. That organization and the law firms affiliated with them are the fundamental root of all evil in Arizona HOA’s and Condo’s.

    Look for a firm with solid fiscal management capabilities and transparency. Pay particular attention to the structure of their contract do they offer a base fee then add special fees for everything. Community management is about making money any way they can. I’ve no problem with people getting paid a fair price for services rendered, but know that price and what you will get for it. Keep it as simple as possible. Make sure that the board retains control over the association money and how it is spent. Interaction with community owners is essential to a healthy community, ensure that the contract contains provisions to that end. Overbearing, rude and dictatorial community managers can raise havoc in a community.

    But the most important aspect of working with a community management company is board oversight. Any community management company can serve a community well or poorly all depending on how much the board is involved. Your board lives in your community the community manager does not, you have a vested interest in your community your management company or community manager does not. There is a valuable service that the management company can provide the association simply because there is too much work for volunteer board to take on. The responsibility for everything the association does lies solely in the board, and how the board sets the tone for expectations of what and how any community manager or management company serves that community will make or break that community.

    Lastly take the time to know your governing documents and the laws associated with your community. Never take the advice of any community manager relative to what you can or cannot do or what you should do in any situation. They don’t know. Your fundamental duty is to treat people fairly and equally and reasonably and to manage to associations resources wisely.

    Dennis

    Go to comment
    2020/07/27 at 6:54 am
  • From Vania Fletcher on Is a change of color palette considered a material alteration

    Hello Dennis,

    Thanks so much for your help! While the common areas are HOA, we have townhomes, single-family attached ownership product, with four-units attached by fire retention walls, one-story building. Since they are attached, all are the same color.

    The only thing I found in the Association documents refer to anything related to the mail boxes, nothing regarding this type of change. As I said, I can see a slight change of color shade but not a change to a color that will be more heat absorbent & will fade horribly.

    There is nothing on the cover letter that speaks of additional cost, but it does state that ‘due to the cost of painting our cul-de-sacs, this project will take considerable time to complete.’ I really don’t know what it means other than the cul-de-sacs property will end up looking like a patch work fading in different shades of prison gray in different areas. This is why our current color is so efficient, you can barely notice the fading.

    Here is the ballot language, verbatim. Dennis, please note that there are actually 3 color choices.
    ————————————————————————————————————————————————————–
    PAINT COLOR BALLOT

    Proposed Action: To select the color homes and common walls will be painted.

    _____ I vote for Pigeon Gray
    _____ I vote for Stanford Stone
    _____ I vote against Trail Dust

    This ballot is valid only for choosing the color of the body of the homes and the common area walls. In order to be counted, it must be received in the office of ( name of the management co. and address), no latter than 5:00 pm on August 31, 2020.
    ————————————————————————————————————————————————————-

    I wrote them requesting all information including minutes of these discussions because no one knew about it. I pointed out that this ballot is in error and not valid. There are 3 choices of colors and the way they listed them is not appropriate – the language should be the same for all three choices.

    I said that I assumed that the choice to vote for ‘Trail Dust’ was just not included and the line with the word ‘against’ should actually read: “I vote against all color changes” – which, if not on the ballot, I requested to be included.

    Again, thanks so much for your help!

    Go to comment
    2020/07/20 at 8:58 pm
  • From dennisl on Is a change of color palette considered a material alteration

    Vania,

    A lot depends on what your specific CC&R’s say. It is not unusual for an association to change the color pallet for the units. You mentioned that you were town houses. Town houses can be considered either condominiums or planned communities. but are typically condominiums. The way you distinguish between the two is who owns the common property if the association owns the common property then you are a planned community, but if the common property is owned by all the unit owners in common than you are a condominium. Why that is important is that for a planned community if the association changes the color pallet they cannot force any homeowner to repaint their home to comply with the new color pallet, but in the future you want to repaint your home you will be required to paint your home in one of the approved colors. If you are a condominium if the association decides to change the color pallet for the common property than it will be done for all units as a common expense for the community as a whole.

    I suspect that you are a condominium, but am unclear why the association is asking the homeowners to approve the change in color pallet? There must be some specific provision within your CC&R’s that requires such approval. Once again I expect it is not the color pallet that is being approved but rather the expenditure to repaint the exterior of every unit.

    To your specific question would changing a color pallet be considered a material change to the CC&R’s . As you are aware I hope you know I’m not an attorney and cannot give you legal advice but such a change would not typically be considered a material change to the CC&R’s.

    If you can provide me the exact wording of the ballot issue , I can provide more insight as to what may be happening. Arizona law requires any ballot initiative presented to the unit owners must allow any homeowner to either approve or reject and specific line item on the ballot. So if the ballot says, chose between a color of grey or pink that ballot item does not comply with Arizona law. It would have to read something like this do the unit owners approve a pallet change to grey: yes or no or do the unit owner approve a pallet change to pink: yes or no.

    Provide me a little more specific information on the actual ballot item and why this is being brought to the unit owners for approval and i can provide you specific guidance.

    Thanks
    Dennis

    Go to comment
    2020/07/20 at 5:47 pm
  • From dennisl on BOD using "Resolutions" to issue rules

    Susan,

    There is a hierarchy to the documents that govern all Common Interest Communities. They are state law contained in ARS Title 33 chapters 9 (for condominiums) or 16 (for planned communities (HOA)), then the community Declaration (CC&R’s) , then the Articles of Incorporation, then the Bylaws and finally the Rules or policies.

    No provision contained in a lower document can contradict or conflict with any provision in a higher document. Only the CC&R’s are recorded and thereby only that document can restrict or limit the use of the individually owned property. In general the CC&R’s give very wide latitude for the association to create rules over the use of common property or to protect the use of the common property for the enjoyment of the community members.

    For example you cannot create a rule that conflicts with any provision of the Bylaws, without first changing the bylaws. You also cannot implement a bylaw change that conflicts or expands on a restriction cited in the CC&R’s. You also cannot create a rule or bylaw change that would add a restriction on the use or behaviors within any private property not authorized in the CC&R’s without first modifying the CC&R’s. One issue commonly missed is you cannot change the bylaws in any way that would conflict with the Articles of Incorporation.

    Far too often associations try and create additional rules to control the behavior of homeowners in their homes, or to restrict the use of private property. Unless those provisions have legitimate purpose to protect the ability of the community to enjoy the common property or are not specifically authorized in the CC&R’s they are inappropriate and illegal.

    Hopefully this helps.

    Dennis

    Go to comment
    2020/07/16 at 8:01 am
  • From dennisl on HOA Community Management Lack of Transperancy

    Jimmy,
    I’m quite familiar with Vision and their owner. They managed the community that i just left. There is very little good that ! can say about the company the owner or any of their current community mangers. In my opinion trained monkeys could do a better job than most of them.

    The contract is clearly a community record and Arizona law requires that any request to view a community record must be provided within 10 business days. I’m not exactly sure what you are looking for in the “annual collection deposit reports” for the community? if you are looking for a report that is not provided to the board of directors than the association has no responsibility to create a report for you to see. I’m assuming that you are looking for income statements from the community. You could ask for this by simply requesting the comity monthly budget comparison reports for the last fiscal year to date. This report is a standard Vision report that would identify the current months income and expenses and a year to date comparison to the budgeted income and expenses. This is generic financial information that is not protected by and confidentiality concerns. However if you are looking for the assessment payments for any individual homeowner you will never het that information. That in fact is confidential. One thing I used to do with Vision is to ask for accounts receivable information on a year end basis. While some of this could be deducted by the monthly financial statements, they are simple summaries and the devil is in the details. The accounts receivable is a standard financial statement and will tell you exactly how much assessment money is missing or not yet paid without disclosing who is delinquent.

    My advice is make your request as specific as you can make it and as focused as you can be. While the law only requires that the association make the records available to view it does not require the association to provide the information electronically. If you want it electronically pay the $0.15 per page and tell them to provide the requested documents electronically. The law limits what they can charge for a hard copy of a record to $0.15 per page. While it actually cost them nothing to provide the records electronically they can simply say no until they are paid for that service.

    If they still refuse to provide you the records requested and the request is reasonable and does not breach confidentiality than you could file a petition with ADRE to force the association to comply with the law. It will cost you $500 to file but if you prevail the association will be required to pay you back.

    Dennis

    Go to comment
    2020/07/14 at 3:35 pm
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