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Friday, November 24, 2017

Two Sides to Every Story: Sorting Through HOA Disputes

Elliott HomeFrom the trivial to the controversial, disputes between homeowners and their HOAs rile up tempers like few other topics in Arizona, whether the argument is about property upkeep, paint color or where homeowners can park their cars.

In Laveen, there are more than 50 residential communities governed by homeowner associations and their accompanying Covenants, Conditions, and Restrictions or CC&Rs. When we asked residents to tell us their HOA stories, we got an earful from both residents and board members.

Residents claim unfair targeting by management companies and HOA boards and then they fear retaliation if they disagree with the board members. They accuse board members of ignoring the will of community members they serve. Local youth groups get told their volunteer parent coaches can’t have “organized” practices in the green spaces of their own communities.

One Laveen woman said two people climbed her fence to photograph her yard and subsequently fine the household for not having a landscaped backyard. The offenders were fired by the management company after the HOA board found out about the trespassing incident.

Another local resident put up an umbrella on her patio during the summer and was cited with a violation because it could be seen over her patio fence. Her HOA board demanded an architectural request from her that recently was approved.

Resident Ralph Padilla sums up the situation: “Seems like some of the HOAs have gotten out of control. Something that was meant to bring communities together, ends up tearing them apart, and pitting neighbors against each other.” Jaime Tovar’s position: “HOA = Hell on Arizona.”

Those who serve on the HOA boards or work for the community management companies, however, point out that there are two sides to the issue. They lament the lack of attendance at meetings, not having quorums to take votes and begging people to read their CC&Rs before complaining about getting a justifiable citation.

“A lot of owners/residents will complain on Nextdoor/Facebook/amongst themselves, but never show up to an HOA meeting,” said Vance Pierce, who serves on the Redhawk HOA at Rogers Ranch. “In almost two years of being on our board, we usually have no owners/residents attend or only a few at best. We encourage more people to show up to their HOA meetings to patiently witness the proceedings and then participate in the open forum before the meeting adjourns.”

Dan Dixon, who has served on the Las Colinas Moradas community’s board since 2003, agrees. Particular challenges that he sees are absentee owners and foreclosed properties where violations go attended for months on end, which makes other homeowners angry at having to take immediate steps to fix their own homes while neighboring houses are left unpainted and yards overrun with weeds.

“We’ve had homes with violations for over a year, and homes that are vacant for over a year, but the assessments and mortgage are all paid up. A bank-owned home or foreclosure is a nightmare. They will eventually pay their fines, but it may be in a year or more,” Dixon said.

Sarah Sarjeant is the community manager for Dobbins Point. Each year during soccer and baseball season, parent volunteers stage practices on the common green areas in the community. And, each year, City Property Management has to be the heavy and request the teams practice elsewhere.

“Our insurance doesn’t cover organized sports,” Sarjeant explained. “It’s been a huge problem for us. If a child is hurt, then the HOA is liable. I don’t believe there is a community out there that would cover organized sports.”

She went on to explain that being liable means if a child were seriously injured, the HOA could be sued for millions of dollar and homeowners could face huge assessments to cover legal, medical and settlement costs.

“A lot of homeowners don’t understand that we spend most of our jobs trying to make sure there is no liability for the HOA. We are protecting the community’s financial interests as much as possible,” Sarjeant added.

But the small issues can add up to big frustrations, as state lawmakers are well aware.

“It’s the No. 1 issue when I get phone calls from constituents and we get a lot of phone calls,” said Arizona Republican Sen. David Farnsworth, D-16. “HOA complaints are one of the most common phone calls.”

Farnsworth described himself as a “lightning rod” for HOA disputes after he first got involved with HOA legislation about three years ago when a constituent came to him about an out-of-control board.

He’s been meeting monthly with an open group of homeowners, realtors and others to discuss Arizona laws regarding HOAs. “The laws on the books are complex and whenever you change something there’s usually an unintended consequences.

“It is not a partisan issue; it’s neither Republican nor Democratic,” the senator said. “We think we can come together on this issue. Our desire is to make things better.”

Jill Schweitzer, founder of HOA Savers in Scottsdale, said that she believes the only way things will get better in Arizona is if the state passes legislation that requires property management companies, which are hired by and work closely with the HOA boards, to be licensed and regulated.

“If they were licensed and regulated there would be a place for homeowners to go when they have minor issues,” Schweitzer said, who spoke to Laveen residents last year as a guest of the Laveen Association of HOAs.

Farnsworth is hesitant about taking that course, though he says he certainly hasn’t ruled it out.
“It is definitely something we could consider, and it was a strong part of our last session. We even prepared legislation to do that but personally … I struggled with that. Arizona is the second most onerous state in the nation for licensures and starting businesses.”

He said Gov. Doug Ducey also is concerned about over-regulating in Arizona and that even if new legislation were passed to require licensure, then it might face a veto.

But rarely does an Arizona legislative session pass that does not include some efforts to regulate property management associations and to curb the powers of HOAs. Industry lobbyists fight just as hard to keep the status quo, and encourage lawmakers to allow self-regulation.

For example, in 2003, Arizona’s Association of Community Managers (AACM) was tasked with improving the quality of community management throughout Arizona and being a “voice of reason” at the state capitol whenever legislation is proposed affecting HOAs and managed communities.

“Our members are required to sign a code of ethics and during their first year of membership to have 10 percent of their managers certified,” said Linda Lang, AACM president and CEO. “That increases to 50 percent the second year and by the third year, 100 percent of their managers must be enrolled and certified.”

Lang said the certification process covers HOA finances, law and the basics of association management, as well as a code of ethics class. Members also are required to take continuing education classes each year. She said she has seen numerous improvements in the industry over the past 13 years as management teams have gone through the training process.

“One of the things that I am proudest of is that we have changed the thought-process,” she said. Instead of being the “HOA police” AACM members are trained “to look at the community as it’s ‘my responsibility to make sure this community is financially sound with happy homeowners’.”

Farnsworth agrees that “generally when we shine the light on things they tend to improve.”

A legislative compromise attempted to address the HOA issues again in 2011 when the Arizona Department of Fire, Building and Life Safety was named as a neutral administrative office where homeowners or HOAs could bring petitions of complaint. The complaints are reviewed then referred to an administrative law judge for a ruling.

In July 2016, the administrative duties were transferred under new legislation to the Arizona Department of Real Estate. Since taking over the task, Deputy Commissioner Louis Detorre said the department has taken several steps to make the process more user friendly, including reducing the cost from $750 to $500 to file a petition for a single complaint, taking the filing and payment process online so all complaints and payments can be submitted electronically, and creating an updated website page that describes in detail how the process works.

From July through September, the Department of Real Estate received nine petitions after taking over the department. Prior to that, there were 23 petitions filed to the Department of Fire, Building and Life Safety between July 1, 2015 and June 30, 2016, and 29 petitions were submitted between July 1, 2014 and June 30, 2015.

 

HOA Resources

HOA Savers

A web site created in March 2014 that has evolved into a forum for providing education and bringing

people together for HOA reform. Operated by Jill Schweitzer in Scottsdale.

Visit www.hoasavers.com (480) 227-3441

Arizona Association of Community Managers

Oversees and accredits property management companies.

668 N. 44th St. Suite 229E

Phoenix, AZ 85008

(602) 685-1111

info@aacm.com

Central Arizona Chapter of Community Associations Institute

CAI is an international membership organization

dedicated to building better communities.

11225 N. 28th Drive Suite B102

Phoenix, AZ 85029

(602) 388-1159

info@cai-az.org

Arizona Department of Real Estate HOA Dispute Process

2910 N. 44th St. Suite 100

Phoenix, AZ 85018

In 2011, the Arizona Legislature passed legislation providing Arizona homeowners and condominium

and planned community associations (HOA’s) a venue for resolving disputes. These administrative

procedures provide an alternative to the civil court system and do not limit the legal rights of the parties

to further pursue matters. The Arizona Office of Administrative Hearings (OAH) will accept all cases

as referred by the ADRE, and schedule a Hearing date before an administrative law judge.

http://re.state.az.us/HOA/HOA.aspx/

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Comments

3 Responses to “Two Sides to Every Story: Sorting Through HOA Disputes”
  1. RIP Jill Schweitzer. We all miss you.
    This whole thing with HOA’s has little to do with the “little ” things that are imposing such misery on people. Especially the ones that ask questions…”every HOA has one”
    See how the whole “money honey pot” is exposed.
    It’s not about the garbage cans.
    Its the money stupid!
    Billions of it.
    Check out a bankers view at http://www.arizonahoa.blospot.com

    • Joanne Lawlor says:

      I was driving to a City sponsored meeting this week and knew Jill Schweitzer would not be there. She left us a month ago. How I miss her – two peas in a pod! It is not easy to make a HOA board accountable – it takes time and money. Time I have (at least I hope so, I’m 69 years old) money – no, I’m low income. Don’t give up – find an HOA homeowner advocates that will help you – if only to listen to you. Don’t have one – become one. Jill was mine and I’m here for YOU! Joanne Lawlor

  2. Caroline Calder says:

    It is unfortunate that not more was written about the various fines charged to homeowners. For example, if a homeowner is 15 days late with his HOA fee, in Trailside where the HOA fees are $55 a month…the fine levied for being late is a whooping $50! It is broken down to $15 late fee & $35 collection rebill….both are levied at the same time/same day. It is just ludicrous.

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