It's been a while since our last post.  This is mostly because not much has changed by way of homeowners' rights in Arizona in the past couple of years.  Some of the trends we are seeing now regarding HOAs in Arizona are:


1. Tenants and landlords often disagree about who is responsible for violations of the HOA's governing documents during the tenancy.  The answer depends upon the lease between landlord and tenant, but also sometimes is further defined by the governing documents.  A tenant may implicitly agree to be bound by the governing documents by merely residing in a community subject to CC&Rs, for various reasons, including receiving the benefit of living there or further because a term in the governing documents or lease contains the tenant's promise to follow the CC&R.


SOLUTION: tenants should ask for and read, even seek counsel for interpreting their obligations under, the community's CC&Rs.  Tenants should ensure any lease is clear about who is responsible for what types of violations of CC&Rs.  For example, leaving trash cans out, weeds or architectural design.  If a violation notice is received the tenant should take immediate action and resolve the question of whether there was a violation and, if a fee has been assessed after notice and an opportunity to be heard, who should pay the fine.


2.  HOAs often have to switch management companies for whatever reason.  New managers often do not honor practices of prior managers, such as grace periods for dues payments and writing off fines for old violations.  Owners often see fines all of the sudden re-appear with a new manager and a new manager is often accompanied by a new law firm for the HOA.  Counsel can have different interpretations of late payment policies, application of dues payments to fines and fees.


SOLUTION: Owners should keep apprised of all events at their community, including what the governing documents require or allow for late payments, fines and collection fees.  Owners should be aware that although there is an argument old violations cannot be pursued, that is a question of fact and law new management or counsel can disagree with their predecessor on.  A judgment would be needed to definitively answer the question of whether an HOA waived the ability to enforce a particular violation.


3. Collection costs are often added to an owner's account without notice and before awarded by a judge.  Arizona law requires a Court to determine the amount of attorneys' fees awarded to a successful party to a lawsuit based upon a contract.  However, the practice of negotiating for probable fees has turned to the practice of demanding fees before a lawsuit is even filed.  Owners sometimes find themselves questioning what a fine is comprised of, but after asking the board of directors are referred to the HOA's attorney.  When the owner contacts the attorney for an explanation, the attorney informs the owner he or she is now responsible for the fees incurred to answer the question.  When an accounting issue arises, for example, because of new management taking over accounts, the time required to answer the question can be substantial and a seemingly never-ending cycle of questions and increasing fees begins.


SOLUTION: Owners should reconcile their accounts, just like one might balance a checkbook each month and should keep a file with check copies, correspondence and anything sent to or received by the HOA.  Accounting errors can still occur, but perhaps the owner with every check copy can provide the board enough information to make a decision without involving counsel and causing attorneys' fees to be incurred.


There will be more posts as trends or changes in this area of the law occur.  Please stay tuned.


McKeddie Cooley has moved and has a new telephone number:


3260 N. Hayden Road, Suite 210-374
Scottsdale, Arizona 85251
(480) 459-5007