Wickenburg Ranch
I know you are familiar Wickenburg Ranch set-up. My question is, does the statement “not part of the Planned Community Act” apply to the entire community or just the separate non profit Golf and Social Club?
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The governing documents distinguish between several different legal entities, so the answer depends on which entity you’re referring to.
According to the governing documents:
Wickenburg Ranch Community Association (WRCA) is the homeowners’ association. Every owner automatically becomes a mandatory member of WRCA upon purchasing a lot or condominium unit.
Wickenburg Ranch Maintenance Corporation (WRMC) is a separate Arizona nonprofit corporation created under the Maintenance Covenant. The front page of the WRMC Maintenance Covenant expressly states, in bold capital letters, that WRMC is not subject to the Arizona Planned Communities Act.
The CC&Rs also recognize the Golf & Social Club as a separate entity governed by its own Club documents and state that the Club is not governed by the Association.
So, based on the governing documents, I don’t think the most accurate answer is simply “the entire community is not part of the Planned Communities Act.”
Rather, the documents establish multiple legal entities. WRMC expressly states that it is not subject to the Arizona Planned Communities Act. The CC&Rs separately establish WRCA as the homeowners’ association with mandatory membership. The legal rights applicable to homeowners may therefore depend on which entity and which issue is being discussed.
No matter what the maintenance covenant says the law is the law and that association satisfies all the conditions defined in the law for a planned community and is subject to the planned community act. The CC&R’s are recorded and applies a title restriction on all property that requires all homeowners to be subject to mandatory assessment to pay for the expenses of the association. That is a planned community. The only exception to that definition is sun city recreation association that was created prior to 1974. This community was created in 2016 and all the associations except the golf club in this community are planned communities.
Dennis
Tim
I’ve always believed that while the golf club is clearly not a planned community subject to the Planned Community Act. The fact that one of the three other associations created in this community, one of which requires all members to pay an assessment for the golf club that is not part of the common property, is illegal and invalid as both an unreasonable restraint on alienation and on trade. But that battle will have to be fought in court by a homeowner. I tried to address that issue in legislation last session, but the builders and lawyers put up such a fight that the sponsor and I had to drop it from the legislation to save the rest of the bill. Which, by the way, did make it into law. Planned communities have the right to require homeowners to pay for maintaining the common property owned by the association; they have no right to require homeowners to pay assessments to fund the maintenance and upkeep of property not owned by the association or the homeowners. Even if that requirement was clearly stated in the recorded CC&R’s.
Dennis
With a new representative this year, will you re-introduce a bill about mandatory fees for non-association property or per your resistance last year is it dead ever getting out of committee?
Tim, I’ll leave the question about re-introduction to Dennis, but I wanted to add something from a homeowner’s side, because this thread clarified an issue I’ve seen cause real confusion elsewhere.
The phrase “not part of the Planned Communities Act” seems to be doing three different jobs at once, and they aren’t the same. This disclaimer appears on the WRMC Maintenance Covenant, so on its own terms it addresses WRMC only. The Golf & Social Club is outside the Act for a structural reason rather than a declared one, since it isn’t an owners’ association created by a declaration. And WRCA is a planned community association by any reading. When homeowners hear the phrase secondhand, though, it tends to get repeated as if the whole community were exempt, which discourages people from asserting rights they actually have.
Dennis’s point seems right to me on the text. Section 33-1802 defines an association functionally, by what it does, and the exclusions in the Act are specific and narrow. NOTHING IN THE STATUTE LETS A DECLARANT CREATE AN EXEMPTION BY WRITING ONE INTO A RECORDED DOCUMENT.
Which raises a question I’d be curious about, Dennis, if you do go back to the legislature. Would a narrow bill confirming that a recorded document cannot disclaim applicability of the Act draw the same opposition as the assessment issue? It doesn’t change what anyone can charge, so it takes away the argument that it costs builders money. It just says a covenant can’t write itself out of a statute. That seems like a smaller target than the non-association-property question, and it would settle a fight that homeowners keep having document by document.
Eleanor Gough
Eleanor,
Eleanor,
Eleanor,
There is a clear hierarchy of controlling documents with state statutes at the top of that list. Nothing in the CC&R’s can contradict state law. This applies both to covenants recorded by a declarant and any contract. The declarant never had the right to declare that your maintenance covenant is not subject to the planned community act. It has a recorded covenant with mandatory assessments required of all homeowners to pay for the maintenance of the common property and the expenses of the association. You satisfy all the conditions of the definition of a planned community and therefore are subject to the planned community act. While I would agree that we could use some clarification on the definition of the planned community but to attempt what you suggest would get little support. The Legislators simply will not be able to understand what you are asking them to enact.
Dennis
Relative to Wickenburg Ranch I’ll be reintroducing part of the legislation we tried to get last session dealing with the validity of covenants. The provisions of that bill will directly apply the exact language that is common law nationwide already but needs to be codified to drive attorneys writing these CC&R’s to comply with the law. If this was law when your communities CC&Rs were drafted many of the provisions in those documents would have never been added. That is my hope but that first assumes that attorneys have any true ethics which is an oxymoron. In either case it will allow any homeowner subject to an invalid covenant to challenge that covenant in court at any time. I’ll be asking the same soon to be Senator to sponsor that legislation. He’s not yet responded to me on that issue.
Dennis
Dennis