💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in

LuciC
Posts: 32
Posted:
Hi,

Recently our Board violated the opening meeting law and gave approval to a homeowner to paint his house a different color which clashes with some of the homes in our community.

Neither the Board nor the management company will comment or reply on this issue.

What can we do?

Thanks

RobertG (Arizona)
Posts: 505
Posted:
Can you explain in more detail how you felt the board violated the open meeting law? Do you have an architectural review committee? Is it defined in the CC&Rs? A few more facts might help.
LuciC
Posts: 32
Posted:
Our Board is also the architectural committee. During an Executive session they approved the ARC request for the homeowner to paint his house a different color - this was not an emergency. Now we have one house which sticks out like a sore thumb. Many of the homeowners are upset. However, we cannot get the Board nor the management company to comment or reply.

Meetings are not defined in our CC&R's only in the Bylaws which are 11 years old. In addition, the Bylaws only reference meetings of the members and Board and does not mention architectural committee meetings.

I was on the Board for the past three years (not this year); and we always discussed ARC requests in an open meeting, especially if there was a major change which affected the community. Whatever the issue, we thought that the Arizona state laws prevailed over our documents.

HaroldS1 (Arizona)
Posts: 314
Posted:
Luci - if you are certain of your facts, you can file for a hearing before the Arizona Office of Administrative Hearings. It will cost you $550 to file one claim or $2,000 if you have more than one claim against your HOA. (I would suggest one well documented claim at a time because going for several just seems to open cans of worms to cloud each issue.) If the OAH judge agrees with your facts, they will require the HOA to reimburse you the filing fee, and could impose a fine on the HOA. The key word is to have an ironclad case. Harold
HaroldS1 (Arizona)
Posts: 314
Posted:
Luci - here are Arizona Revised Statues regarding planned communities: http://www.azleg.state.az.us/ArizonaRevisedStatutes.asp?Title=33
stroll down to chapter 16 for planned communities (Since you mention houses, I assume you are not a condominium) Check the Arizona statues for open meetings. They will supersede anything in your documents. You will also note a member has the right to speak during an open meeting before any vote is taken, as well as to speak generally at a specified time during the meeting. You can also request copies of documents and they must be furnished within a specified time. There is no legal reason for the board or management company to be stonewalling you on this issue. Harold
LuciC
Posts: 32
Posted:
Harold, Robert thanks for your replies.

Yes, I have the url to the statutes, and have sent it to the Board. In addition, I posted the open meeting law in our community. The previous Board is well aware of all the facts.

Our HOA already lost one suit in an admin. hearing - guidelines weren't clear. Not only did we have to repay the $550, but it costs us $6,000 in attorney fees (HOA has to be represented by an attorney). This affects everyone, and we prefer not to go that route.

I believe our best and cheapest procedure would be to contact an attorney and have he/she send a letter to the management company and Board confirming that the state laws prevail; and if they do not comply, then we could seek action in the admin. court.

Luci
LuciC
Posts: 32
Posted:
Sorry typo,

should read "the current Board"

Luci
RobertG (Arizona)
Posts: 505
Posted:
I have faced the same dilemmas on how to best proceed. It is true that you can get your $550 fee back if you win, but winning means the community looses money (as you state). Lawsuits are just not the only answer.

Contacting the attorney and sending a letter is still going to cost. These types of problems are just a loose - loose situation, in my opinion. This is especially true if the board just ignores any reasonable request and continues on their merry way. The problem with the Arizona statues is that it is not enforceable except by civil court. It is too bad there is not an HOA commission that could force the board to comply, but that is not ever going to happen in my future.

We have a board that has probably violated this law more times than I have fingers. Will anything be done, probably not. However, I do think that the next board election will help resolve the problem. If not, then ...

If you need a local attorney to represent the homeowner's side, I have a recommendation.

LuciC
Posts: 32
Posted:
Robert,

What is your recommendation? I hope it is not Beth Mulcahy. She is the attorney for our management company and stated that she could not get involved as it would be a conflict of interest. Apparently, she can only represent the MC and Board.

Thanks
Luci
RobertG (Arizona)
Posts: 505
Posted:
I would like to discuss this offline, but I don't know what is the best way without giving you my email in this public forum. Any ideas?
RogerB (Colorado)
Posts: 5,067
Posted:
Robert, you can click on "My Profile" above, then click on "send email" to communicate offline.
RogerB (Colorado)
Posts: 5,067
Posted:
Robert, you can click on "My Profile" above, then click on "send email" to communicate offline.
RobertG (Arizona)
Posts: 505
Posted:
That doesn't work for me. If I go to the My Profile at the very top of the discussion area, it only gives me my profile, not Lucy's. Am I doing something wrong?
RogerB (Colorado)
Posts: 5,067
Posted:
Sorry Robert, I told you wrong. I checked and found no way to send an email or email address to a poster on this board.
HaroldS1 (Arizona)
Posts: 314
Posted:
HOA has to be represented by an attorney>> Luci, wherever did you get that idea? From the HOA's attorney? That is not correct. Go to OAH and read their questions and answers. Your board CHOSE to use an attorney. The expense should be borne by them, not the homeowner members.
By not filing again with the OAH, you are playing directly into the boards hands. This is their attitude: "No one will spend the money to challenge us, so we can do whatever we want." If your filing costs the members often enough, maybe they will rise up and replace this board and MC. Harold
RobertG (Arizona)
Posts: 505
Posted:
I am not sure where you are getting your information, but the actions of the board become the actions of the HOA.

Just out of curiosity, are you a lawyer?
RobertG (Arizona)
Posts: 505
Posted:
LuciC, please contact me at [email protected]

This is a temporary email so you can get my real one.
HaroldS1 (Arizona)
Posts: 314
Posted:
the actions of the board become the actions of the HOA.>> Not necessarily. If they use poor judgment with their fiduciary duty they can be held liable for their deeds. And actually I said "they should". Not that they must.
Luci - I would be careful contacting people off line. Have to wonder what needs to be said offline that can't be said here. There must be a reason this site does not allow personal contact. Harold
LuciC
Posts: 32
Posted:
Hi All,

No, I am not an attorney. However, I have been on the Board many times and have been an active member of our HOA for 10 years. Therefore, I always try to understand our CC&R's/Bylaws (not an easy task) and keep abreast of the new state laws.

But, this is the first time we have had a "dead beat board"; and we blame the management company more than the directors, who are volunteers.

I believe I know the answer to reason why we (other HO's have sent emails) are not getting any replies.

First, hard core evidence, probably not:

- true, the house has been painted
- my husband and I attend all meetings and nothing was discussed regarding this ARC request
- one board member told us the approval was in an executive meeting, verbal communication, not valid in court

So, when thinking about it, they are guilty as charged; and what can they write without incriminating themselves? Nothing! Hence, no responses.

Secondly, we asked about the date for the next open meeting as many homeowners want to discuss this issue. No replies. Our last meeting was in April.

Can we force the Board to hold a meeting? Doubt it.

Luci

LuciC
Posts: 32
Posted:
Harold,

I read the information on this site:

http://www.azoah.com/QLawyer.htm

which states:

"Corporations or other legal entities are not individuals and therefore must be represented. "

HOA's are non-profit but none-the-less a corporation. If I misunderstood the information, please let me know.

Thanks
Luci
HaroldS1 (Arizona)
Posts: 314
Posted:
Luci - Here's what I found: Paragraph 2 states as you said, Corporations must be represented, but the Supreme Court allows these entities to be represented before the OAH by full-time employees and officers.
But I doubt any HOA officer would do this, being too unsure of their information, hence spending the members' funds on an attorney.

DO I NEED A LAWYER?

No one is required by the Office of Administrative Hearings to have a lawyer. Individuals may, of course, represent themselves. However, when a party wishes to be represented by another, the Supreme Court restricts that representation to licensed attorneys, with exceptions. (see generally Rule 31, Rules of the Supreme Court )

Corporations or other legal entities are not individuals and therefore must be represented. The Supreme Court allows these entities to be represented before the OAH by full-time employees and officers, subjects to certain requirements. (see Rule 31(a)(4)(K)) An example would be a contracting company in a Registrar of Contractors case who could chose to be represented by a properly authorized corporate officer or employee.

Certain exceptions also exist for agencies whose hearings are conducted by the OAH. (see for example Rule 31(a)(4)(L) , allowing anyone to represent a party in AHCCCS cases, as long as no fee is charged. )

The Office of Administrative Hearings may not give legal advice to you, although it will do everything it can to provide you with a fair and impartial hearing. It will also help you understand and follow the procedures to present your case.

In any proceeding in matters under Title 23, Chapter 2, Article 10 of the Arizona Revised Statutes, before any administrative law judge of the Industrial Commission of Arizona or review board of the Arizona Division of Occupational Safety and Health or any successor agency, a corporate employer may be represented by an officer or other duly authorized agent of the corporation who is not charging a fee for the representation.
RobertG (Arizona)
Posts: 505
Posted:
Luci - I meant to ask Harold if he was a lawyer.

I am not a lawyer and in this case I am probably not smarter than a 5th grader, but here is my take on this.

The board has supposedly violated the open meeting law. The board acts on behalf of the association, thus if the board violates the law, the HOA violates the law. Anyone (you) can file a civil claim based upon the open meeting law. Since the law now states the Administrative Judge makes the decision, that is where the case is heard. You, as an individual, can have legal counsel if you choose. However, the HOA, being a corporation needs legal counsel. In your case, that cost the HOA $6000. The HOA looses and the HOA has to pay your $550 fee for filing the action. The HOA has to pay the HOA attorney $6000. That money comes from the assessments of the homeowners (you). Now the homeowners can take the approach that they feel the individual members failed their fiduciary responsibilities and may sue the individuals for not performing their duties. The board members may have an insurance policy that would then allow them funds for a legal defense, but the insurance company may find that their failure to follow the law invalidates the policy. At that point, each board member is on their own for their legal fees and any possible judgement decision. However, the HOA still has to pay the attorney fees that HOA (you) incur to sue the board. No matter the outcome, it is a long process and there is no assurances the outcome will be in your financial favor.

At some point we all need to ask ourselves how much we are willing to spend to prove we are right. It is not an easy answer.

I have heard comments from various lawyers that the Administrative judges do not understand HOA law and the decisions have been poorly made. These comments have been from lawyers representing both sides, both for and against HOAs.
LuciC
Posts: 32
Posted:
Hi,

My husband and I spoke to our attorney and are willing to pay $200 to have a certified letter sent to the management company which includes reading the CC&R's, Bylaws and Arc Guidelines.

Actually, several neighbors have said they would contribute to our attorney fees.

What we want to accomplish is that the management company and Board desist in making decisions behind "closed doors". Our main worry is that the liability insurance will not pay when there is a legal issue, for example, he/she cannot sell their house because of inappropriate standards in the community. If the insurance does not pay, than the court costs and damages are divided among the homeowners - gulp! None of us want a lien against our houses. Of course, this is an extreme example, but all you need is a "sue happy" person to cause such a situation.

I believe all of you, whether in Arizona, California, etc., should be aware that the HOA is required to carry liability insurance on the Board. However, there are conditions where the insurance companies will not pay. Since I do not have a copy of our policy, I am only assuming that violating state laws may fall under that category.

I will keep you posted with new information as soon as we learn it.

Take care.

Luci
JohnC10 (Arizona)
Posts: 106
Posted:
Quote:
Posted By RobertG on 05/24/2007 6:51 AM

I have heard comments from various lawyers that the Administrative judges do not understand HOA law and the decisions have been poorly made. These comments have been from lawyers representing both sides, both for and against HOAs.

I have had experience with ALJs and do agree that unless you are lucky enough to get a smart one the judges know little about most subjects. Good judges don't need to work for the AZOAH.
JohnC10 (Arizona)
Posts: 106
Posted:
As an aside- after the judge hands down his decesion you have a right to petition the office for a rehearing. At that point the same judge that presided over your hearing and handed down the decesion is the one that reviews your appeal and decides whether you will get a re-hearing. A clear conflict of interest as far as I'm concerned. You can also appeal to Superior court.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

  • ✓ Ask follow-up questions
  • ✓ Share your experience
  • ✓ Get expert advice
  • ✓ Access 350,000 discussions
Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here