Homeowner Dispute

Mary,
There are two approvals required here.

1. The owner needs city approval in order to meet code requirements. That's all the city cares about and is in no position to pass judgement on meeting any requirements of the association; nor do they care.

2. The owner must also obtain approval of the Architectural Committee. The AC cannot relieve the owner of getting city approval, nor can they state whether or not her proposed alteration meets or does not meet code. The AC must, in fact, require that the owner get city approval. So, getting city approval first was probably in order since it would be one step in the process of getting AC approval.

After getting approval for the larger loft from the city, the homeowner should have gone back to the Architectural Committee for its approval of the larger loft before construction was started.

However, before imposing a fine, the AC or the board should have given the owner an opportunity to correct the situation by restoring the project to the plan which had been previously approved. If they did not provide ample notice or a hearing (probably required by association documents) then the fine is probably not legal.

The homeowner was given the opportunity to either return the loft to the original size approved by the HOA/AC or she could agree to the fine imposed by the HOA. She and her attorney, who she brought to the meeting, agreed with the fine that was imposed. She was given a deadline to the pay the fine and after three months is now denying she agreed to the fine that was imposed. Her attorney has now written letters the fine is not allowed because the City approved her plans and she did not agree to the fine at the meeting. Any suggestions?

She completely disregarded the HOA rules. Everyone else has had their home approved by the Architectural Committee prior to going to the City of Phoenix. She elected to go to the City first and then present. when she was told it didn't conform she agreed to the smaller loft and said in another meeting she had no intention of building a larger loft. At the same time she had gone back to the City to have them approve the larger area and basically has told us tough. The night we had the meeting she was told she could take back to the original size or pay the fine. She said she would pay the fine and now she says she never agreed to this.

yes we have the minutes and a letter went to her after the meeting confirming this. Her attorney was at the meeting when she agreed to the fine and three months later she is stating she never agreed to this. She had her attorney write the letter she had not agreed to this and now we are picking on her. She is on the board of directors and her attorney has advised she will have to declare a conflict and can then vote on this as well.

How much is the fine? In other words, you agreed to allow her to keep the larger loft if she pays the fine? To me it would be worth it to get what I wanted and bypass your regulations. (That could establish a precedent too!)
If the city approved the plans, I'm curious what your objections are? How is this larger loft affecting property values or asectics for your community?

Don't you just love it when board members try to circumvent the rules? That's what this person has done and seems to be getting away with it. At first my thought was only a 2' difference isn't that much to worry about but then I realized this is a board member. She should know what the requirements are for approval of her project. It should be noted that although the city would be required to issue a permit for the construction, the assn's guidelines can be more restrictive than city code. That is why approval from both entities is required. Regardless of what the city approves, the A/C guidelines may be different resulting in a non-approval from the assn. That does not mean you can go ahead with construction just because the city approved it.

Our Documents-- ARC guidelines) and our CC&Rs can demand that any addition or change that does not meet the requirements for height, setbacks or sq. footage, can be demanded to be removed or corrected. The Board has the authority to order it's removal or change and if it is not corrected according to the time frame set in writting within the documents, the Board will hire someone to remove or change it, at the owners expense. Because we are a new developement, the Developer was savy and fairly on top of what people will try to get away with. We have only had to flex these muschles once out of 565 homes and that was to remove water collection cicterns that were big and set out in public view. We got the job done and it set a great example of "FOLLOW THE GUIDELINES AND APPLY BEFORE YOU JUMP INTO A PROJECT"

Mary, I believe has just a little error in her description of who has priority over an addition. It is NOT the HOA but the City building codes. An Association can restrict height limits and the City will certainly abide and follow restrictions from the ARC, and abide by those but the City does have the priority over what is allowed. Cities will not issue a permit for any height restrictions that are against a communities documents. And no association will have any authority over what the inside will look like. That is where the City building inspection comes into play as there are safety and codes to follow and they will be the ones issuing the permit to build.

You are correct. The by-laws give the AC the ability to say no. Since this is a small association it was voted on by all members at the meeting (quorum at the meeting). The home is almost complete and the owner and contractor are diligently working to get this completed within the next couple of weeks.

The problem is she agreed to paying the imposed fine and is now stating she never agreed to do so. Her lawyer says the association is extorting money to benefit the community (which would also include her as a member). She is on the board and will be voting that the association should do nothing further.

She got the house she wanted, violated the rules and has not made any friends over the whole ordeal. We would have been wise to have said "no" to begin with and not bargained with her at all. I guess that's what happens when you try to get along with your neighbors.

Donna,

I have to agree with MaryA1. Maybe in Florida or in your locality the local officials would insure that an owner complied with the association's documents, but I know our local officials couldn't care less. It's not they're problem. Since I also serve on one of our town's advisory councils, I know most of the folks on the various town boards and I can assure you all they care about is that the building codes are enforced. It's up to each HOA to enforce it's own rules.

As far as inside of a unit goes, an HOA has control over the inside insofar as it affects the value of the community or potential liability by the association. The association can require that all work meet local code, that licensed plumbers, electricians, etc. be used, that any work done does not impact the association's existing insurance policies, etc. A unit owner might not be able to install something in his or her unit that could be an increased fire hazzard, for example.

Bruce I'll agree with you that lawyers cost a lot of money and the outcome is not guaranteed however IMO if they let this stand without contesting it then the next one will maybe have a 35 foot roof; hey the city approved it so it must be OK and they will have a precedent on their side. When the woman bought the property presumably with the aid of her lawyer, she signed a contract that she would abide by the Covenants governing the property and abide by the rules of the Association and the Association should act to preserve its rights.

As far as paying a lawyer to get a larger loft, the world is full of people who think they're above the rules and will go to any length to prove it. Besides it’s a win - win for the attorney he gets paid by her to bully the BOD, he gets paid more if the case goes to trial. There is and old saying to the effect of: "One lawyer in a town will go broke, but two will make a very good living."

Glen,

The problem I am having is that I've seen something similar to this before, first-hand. Personally, I don't think he's being paid. I'm guessing it's a lawyer "friend" or a relative, willing to work for free to bully the board, but it will be another matter if it is threatened the case may go to court. Furthermore, I'm betting (now I don't know, of course) that it's a "generic" lawyer - you know, the kind that handles divorce cases, wills, probate; that sort of stuff. I'm betting it's not a lawyer who specializes in community association law. (I've seen, also first-hand, what can happen when a generic lawyer goes up against a specialist.)

First, I think the board should do some research to get a better handle on what they're dealing with, before they run headlong into legal action. I would suggest they consult a lawyer and let the lawyer tell them whether or not it's a good idea to litigate.

I do have a couple of questions for MaryW5, though:

1. Does the board have D&O insurance?
2. Does the board have access to a lawyer who specializes in HOA law?

I don't see your point Mary: In No. 1 he must inform THEM (other board members.) In No. 2 he must play no part in THEIR deliverations or vote. Where does it specifically forbid HIM from voting? Has this been tested?

Whatever. Just opinions again. Maybe you should ask the attorney general for his opinion since you value it so much. LOL.
We don't even know if it would make a difference with the outcome on MaryW's board if this person were to vote or not vote. We also don't know if her lawyer is competent in this type of situation or just egging her on for billable hours. (Or acting for free as has been suggested.)
You seem hung up on corporate and non profit law. Are you aware of any cases filed with the OAH (or Superior Court) for HOA violations of corporate or non profit law?
Here's another opinion: with some here advocating full legal speed ahead: it would appear MaryW's board has already compromised their position by negotiating acceptance of the larger loft earlier. It could be their only recourse now is to pursue for the fine that was negotiated.
Isn't it an amazing web our volunteer boards sometimes weave?

1. The association has been turned over by the developer.

2. The owner is not working with the developer and has hired their own GC to build their home.

There are a total of fifteen lots in the association. She is the ninth home to begin construction and six are left. Two of the six have plans in with the City of Phoenix.

Harold,

Doesn't everyone on this site mostly offer their opinions? Although I did note you interjected a bit of levity in your remark. Thanks for that. :-)

I don't think I'm hung up on corp. or nonprofit law (whatever that is). But, shouldn't we be looking at the law, if there is one, when discussing these issues?
I thought you knew what the OAH was for. They will only settle disputes involving a violation of the assn's docs or state law. I'm not certain what you mean by "corporate of nonprofit law". Title 10 contains statutes applying to corporations including nonprofits which is what HOAs come under (Chapter 24 through 40). I've heard the OAH won't touch a supposed violation of a Title 10 statute, but I don't know that for sure.

I think some boards are just too quick to issue violations. In this case I seem to recall the loft was 2' above the assn's requirement. Is that really enough to cause such an expense to the h/o? Of course she did violate the rules and she is a board member who should know better, but those things should be put aside when reviewing the situation. A decision should be made based on common sense -- nothing else. I'm sure her attorney and also the board's attorney is hoping the board will pursue this. You know how the HOA attorneys like to call some of the HOA bills the "attorneys' enabling act"; well this is an example of the "attorneys' enabling case".

MaryA1: I tend to agree with your position re some boards being quick to issue violations. Apparently in this case, the HOA restrictions do not line up with the local restrictions, and the HOA restrictions are actually MORE restrictive. They have caused an owner to seek legal counsel to allow her roof to be 2' higher (than others? is this the real problem?). A raised roof certainly does not compromise the integrity of the community and if the locals have issued the bldg. permit and all is according to code, why not? This doesn't make sense to me.

Further, out of 15 homes in the community, about half are not built yet and the developer has already made transition to the residents. I think there's more going on here and there will ultimately be more problems for us to read about.

Mary a reasonable accommodation was made in this case and the party reneged on paying the fine. In the case you presented with the paint at what point would you enforce? Beige was approved but they painted it purple? Aquamarine? Chartreuse? Fuchsia? Orange?

MaryW5: I think you all are missing the point here. The board is required to enforce the bylaws. A HO has violated the bylaws. If you do not take action the board could be legally liable , as a board and as members individually . If you don't follow through you will have set a precedent as far as the court is concernd.
Also, I wonder why the developer turned over the association in the first place before all the construction was completed. Most ccds allow the builder to make changes as he sees fit until all construction is over!! So would this effect the HO asking for a change? Better check that out. Good luck....TomK2