Homeowners Appeal Process

Arizona Appeals Procedure help

Homeowner advised me that she plans to appeal a violation. I mentioned this to another Board member. I was told homeowner can't appeal to the HOA BOD. That doesn't seem right but I took some time to read through the enforcement section of our CC&Rs and cannot find anything detailing an appeal procedure. I did find a Compliance Committee Procedure document used by a previous BOD that advised that a homeowner can appeal the Board's final decision. The current Board I'm on doesn't have a compliance committee so I'm unsure if this procedural document would apply. I do know homeowners can appeal to the Az Dept. of Real Estate. Does anyone have any insight to offer on this?

This process will potentially be found in your State Laws. Are you Condo or Single Family Homes as there are generally different sections of law for each?

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I think regardless of whether your CC&Rs, past policies or state statutes speak of an appeals procedure, case law would support letting the Member appeal to the Board. The courts want to see HOAs at least try to provide due process. For one thing, this reduces the load on the courts (or in this case, your state's Department of real estate). Among other things, "due process" means Members should be permitted a final appeal to the Board. After all, per a HOA's governing documents, the Board has the ultimate control over how the HOA is run. It exists in part to "enforce" the governing documents and sometimes, really dig in to see whether the wording of the governing documents has been correctly interpreted by, say, management, any HOA Architectural Review entity, accuser, etc. If a majority of the Board sees enforcement as incompatible with either the governing documents or the law in a particular instance, then I would say the Board has a duty not to enforce.

No problem, Diane. Perhaps your Board might want to consider passing a resolution with an appeals procedure? Maybe codify what existed in the past with the Compliance Committee? At some point, to be included in the Rules & Regulations? Have the HOA attorney review the proposed procedure.

My HOA's appeal procedure came about following a HUD complaint that cost the HOA a fortune. Part of the settlement with HUD required that the HOA prepare a draft appeals procedure and submit it to HUD for approval by a certain date. After approval, the HOA mailed the appeals procedure to all Members as "formal legal notice" of their right to appeal alleged violations. I think it is a pretty decent appeals process. It is covered in roughly one page and is a part of my HOA's Rules and Regulations. It has the basics like: The accused has to ask for the appeal hearing within 30 days of the notice of violation. The accused is permitted to confront the accuser in the hearing. Both sides may bring witnesses to what is claimed. The hearing is open only to the accuser, the accused, their witnesses, and the Board. It is confidential.

Then if either side is unhappy with the outcome, per the Rules and Regulations they can request arbitration. Of course, either side can also go directly to court. If the matter goes to court, then I think how the Board handled the appeals hearing will be important.

Good luck.

33-1803. Assessment limitation; penalties; notice to member of violation

B. After notice and an opportunity to be heard, the board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association. Notwithstanding any provision in the community documents, the board of directors shall not impose a charge for a late payment of a penalty that exceeds the greater of fifteen dollars or ten percent of the amount of the unpaid penalty. A payment is deemed late if it is unpaid fifteen or more days after its due date, unless the declaration, bylaws or rules of the association provide for a longer period. Any monies paid by a member for an unpaid penalty shall be applied first to the principal amount unpaid and then to the interest accrued. Notice pursuant to this subsection shall include information pertaining to the manner in which the penalty shall be enforced.

Your State Statutes notes members after any notice have "an opportunity to be heard". You just need to schedule a proper meeting for the homeowner to present their evidence on why they potentially did not violate what was contained in their notice. As Augustine noted Courts prefer that issues try to be settled to avoid litigation. If you did not allow an owner any opportunity to be heard the Court would kick out and require you to have a meeting with the Owner. If it still ends up in Court ... they generally will require a meeting with an arbitrator to see if can be settled before proceeding.

Thanks Guy. That is the same advice our attorney has provided us as well, and the same procedure we have followed when handling violation charges. We have a hearing scheduled for homeowner on Nov. 2. The hearing is specifically to allow homeowner to provide evidence to defend her position; accordingly if the Board finds the violation is still valid after the homeowner speaks, we are then in a position to impose a penalty (fine, litigation, self help). My understanding is that she could then appeal the decision made at the hearing if she doesn't agree with it. That's the part our CC&Rs don't address. ...and that's why I am very grateful for the input and suggestions from this discussion to understand the legally correct way to proceed, assuming the homeowner does appeal...

I include the line about the right to appeal to the dept. of real estate board in the 1st & 2nd notices. :-)

The notice of the right to appeal to the Dept. of Real Estate is required in Arizona