Arizona OAH Penalizes HOA for Intimidation

In a historical first, the newly instituted Arizona law that allows HOA complaints to be adjudicated by the Office of Administrative Hearings (OAH) resulted in a penalty order against the HOA for the intimidation of the homeowner. In OAH case # 07F-H067006-BFS, the ALJ decision included:

Respondent threatened Petitioner with the imposition of its attorney fees in this matter, which it had no basis for doing so. The Administrative Law Judge concludes that the imposition of a civil penalty is appropriate for such improper conduct by Respondent.  IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $500.00 to the Department within 30 days of the effective date of the entered Order in this matter.

Many homeowners will tell about HOAs and their attorneys giving dire warnings about the cost of litigation and the payment of attorney fees to scare off complaints against the HOA.  Last year in Arizona, an HOA attorney was given an informal sanction for his attempt to stop a Bar complaint by reducing the fees that he would charge as the HOA attorney. The judge hearing the HOA complaint wrote,

After the Court indicated that there would likely be no award of fees in this case, Defendant was billed approximately $6,000 for Plaintiff’s fees. Though this billing was retracted after Ms. M brought the matter to the Court’s attention, Mr. S continued to demand that she “settle” the case for $2,000.00 – more than 400% of the amount actually owed. Coupled with this monetary demand (which counsel could not justify at today’s hearing) was a demand that Defendant drop complaints that she had filed with the State Bar of Arizona against Mr. S and with the State Board of Accountancy against a member of the Association.

It is unfortunate, however, that homeowner justice and the ability to obtain a fair adjudication by OAH has been threatened by the recent requirement of an unheard of $2,000 filing fee, which is being challenged pursuant to APA statutes.  It appears that the HOA special interests are afraid of the truth getting out about HOA abuse, as has been repeatedly charged by homeowners. 

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Published in: on March 12, 2007 at 7:22 pm  Comments (1)  

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  1. George, the only good thing I can think about this $2,000 filing fee, is that if the homeowner has an ironclad complaint so that the OAH will have no recourse but to rule in the homeowner’s favor and the HOA will be required to reimburse the $2,000 filing fee and eat the attorney fees. Maybe after a few of these the other members will begin to wonder why their assessment fees are being spent to put an attorney’s child thru college.
    The downside is: Who’s going to risk $2,000 on the HOA’s legal shenanigans and whim of a judge?
    p.s. -As for your example of attorney Mr. S: He is still out there harassing homeowners. So much for the state bar association.


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