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  • From dennisl on Arizona law regarding a past HOA election audit

    Susan,

    Unless the board has established their own rules for the use of the funds in the reserve or for the process of adding or removing any item from the Reserve (Capital) plan. Which by the way should be the way that all of these communities operate but none do to my knowledge. The board is free to do anything with the reserve fund and the overall capital plan as they see fit. Some community CC&R’s do place some limits on the amount the board can spend on any project without community approval, but these are clearly the minority and few and far between. Look to your specific CC&R’s for further guidance. I actually attempted to establish standards in state law for the use and management of reserve funds and long term capital planning in 2016, but that proposal never saw the light of day based on the resistance from the HOA trade groups. If anyone would like to see what a good capital planning and reserve fund guideline looks like , just drop me a note and I’ll send it to you directly.

    Dennis

    Go to comment
    2020/07/09 at 4:24 pm
  • From Katken on Can the Board remove items from the Reserves?

    I do hope these stories from the field help in some way to influence state law around what is really happening in our communities.

    Thank you for your efforts.

    Go to comment
    2020/06/22 at 8:07 am
  • From Katken on Can the Board remove items from the Reserves?

    Thanks Dennis. Our CCRs do require homeowners to install a specific septic system and states, after installation the Association “shall assume responsibility for the monitoring, maintenance and repair” of the system. It also states “with the costs thereof to be included as part of the Assessments payable by each Owner.” Capital improvements and replacement are on the homeowner. We also already have a lawyer interpretation on this from 2014–confirming dues pay for maintenance and monitoring and repair can be charged back as dues. I was hoping the lawyer interpretation with the reserve studies would make this a slam dunk. I do feel the CCRs on their own are clear enough.

    So we will probably be back to lawyers, that is if the Board deems it necessary to engage them. Otherwise the homeowners will have to hire one on their own or have the CCRs in violation by their own Board and just pay for their own septic pump? I do not know how other Board members approach issues in other communities, but ours seems to think their duty is to protect the Association from the homeowners. If we worked together, and the CCRs septic language was presenting a strain on the association in unforeseen liability etc., then it seems appropriate that the Board make a case to remove the language and get the vote to change the CCRs.

    We have a Board that does not talk to the community. We went through a Board removal vote a few months ago. Most of the neighborhood did not know why. The ballot read ‘recall’, not remove. There were no definitions or instructions, so many misinterpreted the ballot. The homeowners wanted the vote to be private to the community and Board, not shared with the Board members for fear of retaliation. The board refused. Half the Board was retained by one vote, the others a few more votes….but a split community. “Retain full Board’ was shared with the community, but not the actual votes that showed how split we were. Since the Board did not want to make the votes private, we could ask to see the actual votes as they were community documents. That is how people saw how they misinterpreted the voting. They signed affidavits of their intent to their vote, and the lawyer said it is up to the Board to accept or not. If accepted 2 Board members would be removed. The President could not make a decision and refused to even communicate this to the community. A letter from the voters with affidavits asked for an answer, they never received one, the President resigned. Only a few in the neighborhood know what really happened. The 2 Board members do not even acknowledge homeowners when walking dogs, so the fear of retaliation is real. The Management company told them a quorum is when any 2 get together, and by law that would require an open meeting. So he has advised them to communicate through his email to avoid the open meetings. So your statement, “But lawyers and community managers do not advise boards on what they should do but rather on what they can do or can get away with” is very true for our situation. We now have to live with these disgruntled Board members for more than another year as state law only allows removal once per term. We do have one Board member who listens, but the other 2 do not work with this person.

    Honestly, when I sell, I will never buy into a community with an HOA again…..I have never seen educated adults behave so poorly.

    Go to comment
    2020/06/22 at 8:05 am
    • From dennisl on Can the Board remove items from the Reserves?

      Katkendall11,

      If what you say about the CC&R’s is correct then the board has absolutely no authority to decide otherwise without a formal revision of the CC&R’s approved by a super majority of the homeowners as specified in your governing documents.

      Your board interpretation of the open meetings laws is also incorrect. The definition of a meeting includes the use of technological means so that any e-mail between a quorum of the board would constitute a meeting and if that was not noticed 48 hours in advance and the members allowed an opportunity to participate in that meeting, it would constitute a violation of the open meeting laws for planned communities. There are no open meeting laws for regular corporations. Remember even HOA attorneys advise boards that they can conduct business via e-mail because of non-profit corporation laws or provisions in the CC&R’s but in reality the planned community statutes supersede both those documents relative to open meetings. This has been proven in court countless times. Please remember while the law is the law, the only oversight and enforcement of the law comes from homeowners, and boards and their attorneys simply do whatever they believe that they can get away with. Because it takes a homeowner to risk their own money to challenge any action of the board in court ,and the association is using all of your money to defend themselves. The Attorney can never be held accountable for the advise he provides a client and he gets paid whether he is proven wrong in court or not.

      Your story of the recall vote is also very interesting. Once again the specific process required by state statute for the recall election does not appear to have been followed. We have worked over the years to enact laws to protect homeowner, and ensure their ability to participate in their community governance and oversight of the elected board members. But far too often we come across board and their attorneys that simply don’t care about what the law says and they simply ignore that law.

      These laws don’t change by themselves that is why I started this coalition to try and get a voice for homeowners heard at the state house. But unless people get involved in supporting the legislative initiatives that I introduce every year the money and the paid professional lobbyist the HOA industry has at the capital will always sway the day and block any efforts for even moderate reform. I will be there fighting for all of you but thousands of Arizonians join me in the demand for better legislation we will never make any improvements in these communities.

      Dennis

      Dennis

      Go to comment
      2020/06/22 at 12:28 pm
  • From dennisl on Can the Board remove items from the Reserves?

    Katkendall11,

    Please read your CC&R’s carefully. Unless your CC&R’s specifically identify the individual septic systems as common property, your articles of incorporation will in fact prevent the association from using association fund to benefit individual homeowners. The reserve study has absolutely no standing in the community governing documents. While the Declarant may have provided the maintenance of those systems in trying to attract buyers, he knew that he would never have to live up to that commitment unless you have clear documented letters from the declarant that the septic systems would be maintained by the association. That would constitute an implied contract and in fact would bind the association to do that in perpetuity. There is in fact legal precedence to that effect in Arizona. The documentation proof could be in the form of sales brochures or fliers and does not need to take the form of a direct letter from the developer to any homeowner. The test is, would a reasonable man infer from the documentation that if he bought the home that the association would pay for the routine septic for either a specified period of time or in perpetuity.

    From my experience it would be very unusual for the HOA to maintain individual homeowner septic systems.

    As to your specific question can a board remove an item from the reserve study the answer is yes, the real question should be should a board remove anything from a capital plan and reserve study with homeowner approval first and that answer is no. But lawyers and community managers do not advise boards on what they should do but rather on what they can do or can get away with.

    This is why it is so important for individual homeowners to get and stay involved in their communities because without that involvement no-one holds the association accountable to the law and the law becomes meaningless. There is no state oversight in the conduct or behaviors of these associations, the community managers or the attorneys that make a fortune advising them. There are only homeowner and the law.

    Dennis

    Go to comment
    2020/06/20 at 6:48 pm
  • From dennisl on Hearing before the HOA & Board

    Susan,

    The specific statute for HOA’s (planned communities) is ARS 33-1803. You have 21 days to request a hearing before the board by certified mail. if the association waives the requirement for certified mail by allowing you to request a hearing by regular mail or e-mail than that removes the certified letter requirement. ARS 33-1804 also allows you to decide if that hearing will be held in open session or in a closed executive session.

    Most community managers do not provide you that choice, and require that the hearing be held in closed executive session. Boards don’t like to screw people in open session where everyone can see them they would much rather do that under the cover of executive session.

    The date and time of a board meeting will be set by the board and not the homeowner. If you want to contest that violation you will have to make yourself available when the board sets the meeting.

    The only reason any homeowner should ever request executive session is if in the process of contesting the violation they will have to expose personal or financial information about themselves that they do not want as public knowledge. Otherwise Always request an open session!!!

    Dennis

    Go to comment
    2020/06/19 at 7:18 am
  • From David on Can HOA restrict street parking on public street?

    Dennis,

    Does an amendment count as a change to the CC&R’s? My community (Marley Park) states we are not allowed to park an RV/Camper in front of our house. The city (Surprise) owns the streets and there rules state we’re not allowed to park for a period longer than 72 hours more frequently than two times in a month. Is my HOA able to enforce its parking regulations established in 2006 but were amended in 2017?

    Go to comment
    2020/06/18 at 11:57 am
    • From dennisl on Can HOA restrict street parking on public street?

      David,
      Arizona law has a provision relative to this issue. What it says is that any association that modifies it’s declaration (CC&R’s) for any reason after 12/31/2014 can no longer regulate in any way the parking or use of public streets owned by a municipality, irrespective of any provision of the CC&R’s authorizing that regulation and control. I actually get many question on this issue and what people believe is that if the association modifies it’s rules relative to parking that this provision kicks in. It does not, the provision only applies to CC&R changes. It makes absolutely no sense that any association can and does regulate the use of streets that it does not own in any way. As with any legislation, the provision relative to the CC&R change was added based on demands from the HOA industry to water down the intent of this bill. While this was before my time I know the individual responsible for it’s original intent and other individual homeowners that fought to defeat this bill because they wanted HOA control to continue for ever. There are no simple answers to any HOA issue but everything boils down to fundamental property right. I will always lean in the direction of who ever owns the property get to decide how that property is used. When I first started my work both individuals were part of our first year members and I often had to intervene between these two totally opposite perspective to this issue.
      I know this was a long answer to a simple question. All too often people interpret statutes the way that they want them to read and not based on what they actually say. When drafting legislation or reading legislation every word counts and takes on their normal meaning.
      Hopefully this answers your question. If what was changed was your CC&R’s that the association no longer can apply any restrictions what so ever on the use of the streets, but it what was changed was their rules on parking than the Statute does not apply and they retain the authority provided by the CC&R’s two regulate the streets.
      Dennis

      Go to comment
      2020/06/18 at 6:23 pm
  • From Susan Lukawski on Cameras on HOA property

    Thank you, I understand the truth is a defense against defamation as it should be. Would a Board member who disseminates information concerning a complaint about one homeowner to another homeowner constitute a breach of fiduciary responsibility by that Board member? It reminds me of the children’s game button, button, who’s got the button. I wish all homeowners realized how much we need a level playing field when dealing with HOA & Management companies. EVERYONE should join and contribute to AZHOC!

    Go to comment
    2020/06/17 at 9:16 am
  • From dennisl on Cameras on HOA property

    Susan,

    In an HOA the common property is owned by the association and not the homeowners. As such the association is free to installed security cameras to monitor activity on or around their property the same way that you would be allowed to put security cameras on your home.

    While a video is simply a recording of what happened in the field of view, there are ways that these recording can be altered. Intentional altering an association record could also be raised in civil litigation. If the association is retaining these recording they become a record of the association and as such are free to be viewed by anyone requesting to view that Record. ARS 33-1805. If someone is intentionally distributing false or misleading statement either verbally or in writing with the intent to defame any individual or group of individuals that would constitute Defamation which is against the law and could be subject to litigation. But if anyone is simply telling what the unaltered video show, no matter how unpleasant to the individual involved that is simply the truth.

    Dennis

    Go to comment
    2020/06/17 at 8:06 am
  • From dennisl on Foreclosure by HOA threat

    Susan;

    There are two types of liens that an association can put on your home. The first is an assessment lien for failure to pay assessments. That lien is statutory and is automatic and does not need to be perfected by a judge. Once that lien for unpaid assessments exceeds $1,200 or one years worth of assessments the association can file for foreclosure on the home in court. All HOA foreclosures must be judicial foreclosures so yes the association needs to go before a judge to foreclose on the assessment lien. Beyond assessment all late fees, penalties, collection cost and legal fees associated with the delinquent assessments are all added to the lien and typically exceed the unpaid assessment ten fold.

    The second type of lien deals with fines and penalties unrelated to assessment. To put a lien on your home for these charges the association must perfect that lien before a judge. However that lien may not be foreclosed on by the association. But you cannot sell your home without satisfying it.

    This is one of the most egregious aspects of HOA life. I’ve seen people lose their homes for a debts of $500 of delinquent assessments and $10,000 of collection cost and legal fees. But the association’s for the most part don’t want your homes the real culprit are the vulture attorneys who want all the money that they charged you to be paid and then will either buy your house or have one of their friends buy your house for pennies on the dollar then sell it a market price.

    Dennis

    Go to comment
    2020/06/14 at 7:42 pm
  • From Susan Lukawski on Board imposed fine

    Thank you for your response. In our case, The Cease & Desist letter states “the Board will fine you in the amount of three hundred dollars which is the fee for my office (the attorney who wrote the letter) to send the letter”. Legal fees? I thought legal fees could not be assessed until adjudicated by a court… I could be wrong… your thoughts please. Legal fees or a fine?

    Go to comment
    2020/06/14 at 2:14 pm
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