Case study on how ‘stakeholders’ create dysfunctional HOA communities

Please read this unfolding case study of how the “stakeholders,” those who have put forth HB 2371, dominate the members of an upscale HOA in Scottsdale, AZ. HB 2371 calls for unlicensed HOA managers to represent HOAs in small claims court and creates an exception to state UPL laws.

In the Terravita Community Association, a vote was held this past Tuesday to amend the CC&Rs to permit the HOA to assess attorney fees against losing homeowners in an administrative hearing. (See HOA democracy at work:  dysfunctional adoption of amendments by minority vote). The unusual wording only permits the petitioner who filed the complaint to be awarded attorney fees if the prevailing party. But, the administrative hearings do not award attorney fees by law, and attorneys are not required. Yet Terravita sees the need to use an attorney and use member fees for this unnecessary expense.

Furthermore, as called to the attention of the Terravita board, the wording of the amendment would strip the existing contractual agreement that attorney fees be awarded in civil court, a more expensive procedure and subjecting the HOA to increased litigation costs.

In other words, state law be damned! The members have declared that they have agreed to ignore the law and to charge attorney fees as stated. And for only a few administrative petitions that have been filed. There was no debate, no discussion, no opposing views presented to the members. Just, “Here’s the ballot. Vote YES and return it.” And the members, like Colonel Potter in MASH who signed anything Radar put in front of him, voted in favor.

It should be noted that the CC&Rs amendment was passed by a minority of the members, only 571 members out of 1380 voted, a minority of 41%, and the amendment passed with just 514 votes or 37% of the membership. Minority voting was approved by the members in 2010, making this mockery of democratic principles possible. In 2011, the legislature had voted down a statute, proposed by the “stakeholders”, that would allow all HOAs to implement minority control of the amendment process — an unthinkable procedure allowing minority adoption of amendments to constitutions and charters.

Well, what does that say about that unassailable, inviolate “contract” that the special interests, those “stakeholders,” have been shouting?  It is meaningless when others can amend your agreement with changes that reasonable persons would not anticipate or expect.  And now in Terravita, by a minority vote. Apparently, it’s not an issue with the members of Terravita.

Tearravita Community Association is an upscale “resort” type HOA in Scottsdale, AZ, with a golf course, community center, and a security guard entrance. It has 1380 members, has a CAI/AACM management company, and a CAI attorney.

Published in: on March 21, 2013 at 10:11 am  Comments (1)  
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  1. Interesting as it is outrageous, special permission to practice law, we already have JP’s that do it, so why should it be any different for anyone else?

    If we need a lawyer to interpret the laws than why shouldn’t only lawyers have to abide by the laws.

    In other words if our legislators are writing laws that only lawyers can understand then why is everyone else expected to live by them.

    Fact is lawyers do not give anyone more rights or access to the laws, they seem to have it all locked up so that only lawyers are expected to be able to interpret them…

    Why are those who have not studied the law mandated to uphold the law, and when a contract cannot be interpreted by a lawyer or a laymen, then why is it that we should pretend to know what to expect from a contract. Than only the person who wrote can understand it.

    HOA’s are formed for the specific purpose of Managing Maintaining or Improving Property, and all the rest should be left up to the homeowners not members of the board who seem to wind up on the corrupted side of the bench.

    AAM LLC, wants to have the right take homeowners to court so they can increase their profits…

    AAM LLC, pushes the board members to aggressively enforce the fine policies in order to increase their own profits.

    AAM LLC, entices board members by promising them perks and jobs if they cooperate with AAM LLC staff.

    AAM LLC, also fixes the vote count and plants board members of their exclusive choosing so they can continue to make profit on the homeowners backs.

    AAM LLC, also sends out frivolous fines to homeowners who allow their reply time to dispute the fine and then AAM LLC sends out a demand letter for the unpaid fine… and ultimetly either the homeowner pays, and then…

    When AAM LLC is allowed to represent the HOA’s in small claims court the JP either give them default or summary judgments.

    Fact is AAM LLC CBHD, PLC just want to make it easier and easier to collect from homeowners and avoid due process.

    These opinions are that of Joseph Jarvis and not of this website, and should not in anyway prejudice the website owner in anyway….

    For more info about AAM LLC please visit

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