Jay Janicek vs. Sycamore Vista No. 8 HOA - 17F-H1716019-REL

Описание: This summary details the Administrative Law Judge (ALJ) Decision in the case of Jay Janicek v. Sycamore Vista No. 8 HOA, heard on March 2, 2017.

Key Facts and Issues

Petitioner Jay Janicek challenged the Respondent Homeowners Association (HOA) regarding its adoption of a Declaration of Scrivener’s Error (Exhibit C).
Illegal Amendment Claim: Janicek argued that Exhibit C was not a clerical correction but a substantive amendment to the Declaration of Covenants, Conditions, Restrictions, and Easements, requiring approval by seventy-five percent (75%) of the lot owners, pursuant to A.R.S. § 33-1817. The Board adopted Exhibit C by a 3-2 vote. Respondent claimed Exhibit C merely sought to reinsert the definition of developed versus undeveloped lots inadvertently omitted from the 2009 First Amendment, relying on advice of counsel.
Assessment Increase: Following the adoption of Exhibit C, the Board voted to increase the annual assessment for developed lot owners by $10.00, while leaving undeveloped lot assessments unchanged.
Conflict of Interest Claim: Petitioner accused the Respondent of violating its fiduciary duty and having a conflict of interest, noting that three Board members had a financial interest in NT Properties, the company that owned the undeveloped lots, thereby implicating A.R.S. § 33-1811.

Legal Findings and Decision

The Administrative Law Judge (ALJ) found the following:
Invalid Declaration: The ALJ determined that Exhibit C constituted an amendment to the Declaration. Given that the language of Section 6.8 had remained unchanged for seven years, adopting a "further change" as a mere clerical error defied logic. The Tribunal concluded that Respondent violated A.R.S. § 33-1817 by amending the Declaration in this manner, and Exhibit C cannot operate to amend the Declaration.
Assessment Validity: Despite Exhibit C being invalid, the ALJ found this did not implicate the HOA’s right to impose the increased assessment. The language introduced in the 2009 First Amendment (which was approved by 75% of owners) already expressly stated that "annual dues may be assessed at one uniform rate for Completed Lots and a different uniform rate for Uncompleted Lots." Therefore, the raised assessment was allowed to stand.
Conflict of Interest: The Tribunal rejected Petitioner’s attempt to challenge the Board’s composition or actions under A.R.S. § 33-1811, finding that interpretation to be overbroad and disregarding the express language permitting the Board to assess annual dues.

Outcome

The evidence of record supported Petitioner’s request for relief. Petitioner’s petition was granted. Respondent was ordered to pay the Petitioner the required filing fee pursuant to A.R.S. § 32-2199.02(A). This decision became the Final Order adopted by the Commissioner of the Department of Real Estate.

Case Details:
Case ID: 17F-H1716019-REL
Docket: 17F-H1716019-REL

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