In September 2013, the Arizona Court of Appeals made a unanimous ruling  in Hawk v. PC Village Association, Inc. that provisions in Arizona’s Planned Communities Act [§33-1808] pertaining to “For Sale/For Rent” signs trump any contrary provision in an association’s governing documents.

This case originated in 2009 when the Hawks placed a “For Sale” sign on their property on two separate occasions. The association promptly removed the sign both times. The association was enforcing its CC&Rs, which prohibited owners from placing signs on their lots and further allowed the association or an agent to enter onto the property to correct a violation.

The Hawks prevailed in the trial court, arguing that they had the right to display a “For Sale” sign because the section of the CC&Rs prohibiting the display was overridden by Arizona Revised Statute §33-1808(F) and §33-441. The association was prevented from removing the industry-standard “For Sale” sign from the owner’s property.  The association appealed the trial court’s decision to the Court of Appeals, which affirmed the trial judge’s ruling, stating the provisions of the Planned Communities Act regarding “For Sale” or “For Rent” signs trump any contrary provision in the association’s governing documents.

The Court of Appeals reviewed §33-1808 of the Arizona Planned Communities Act in this case; however, there is a similar provision in the Condominium Act [§33-1261], so it is important that both Condominiums and Planned Communities adhere to the following:

Notwithstanding any provision in the community documents, an association shall not prohibit or charge a fee for the use of, placement of or the indoor or outdoor display of a for sale, for rent or for lease sign and a sign rider by an association member on that member’s property in any combination, including a sign that indicates the member is offering the property for sale by owner.

The size of a sign offering a property for sale, for rent or for lease shall be in conformance with the industry standard size sign, which shall not exceed eighteen by twenty-four inches, and the industry standard size sign rider, which shall not exceed six by twenty-four inches.

The signs must be commercially produced– an association may prohibit the use of signs that are not commercially produced.

Written by: Carolyn B. Goldschmidt
October 2013

The mass exodus from Tucson’s summer heat is in full swing. As a result, this is the time of year when homeowners association (HOA) boards have issues with absentee owners and absentee board members.

The Arizona Non-Profit Corporations Act requires boards of directors to meet at least once each year. Most HOA Bylaws require periodic board meetings and the reality is that vacation time does not mean that the operations of the association also go on hiatus.

Suspending Meetings. Some boards decide to forego having any meetings during the summer. If an association does not have a community manager, the Association President or Treasurer might be authorized to approve unbudgeted expenses within a specified spending limit. In larger associations, an executive committee of the officers is authorized to act on behalf of the board during the hiatus. If an expenditure arises that exceeds the authorized limit of these interim decision makers, a special meeting needs to be called or an action without  a meeting needs to be organized.

Action Without a Meeting. The Non-Profit Corporations Act (and most bylaws) authorizes a board to take any action that could be taken at a board meeting to be taken without a meeting. All of the directors need to give their written consent, and the consents need to be included in the minutes filed in the corporate records reflecting the action(s) taken [A.R.S. §10-3821]. A board member’s consent to the action can be submitted via email, fax, or U.S. Mail.

Including Absentee Board Members in Meetings.  Condominium and planned community board meetings can include absentee directors via speaker phone or videophone attendance. A quorum of the board of directors of an association is permitted to meet by conference call if a speakerphone is available in the meeting room that allows board members and owners to hear all parties who are speaking during the meeting [Open Meeting Law: A.R.S.§§ 33-1248(D)(3) and 33-1804(D)(3)]. If an association is neither a planned community nor a condominium, then it would be best if the bylaws authorize a director’s attendance via speaker phone.

Proxies. One board member can give his/her voting proxy to another board member if authorized in the Association’s articles of incorporation or bylaws [A.R.S. §10-3824(G)]. A board member needs to realize, however, that voting via a proxy at a meeting brings the same responsibility for a decision of the board as when the director is present at the meeting.

Open Meeting Law. Generally, Arizona’s open meeting law for condominiums and planned communities requires at least 48 hours prior notice to members of a board meeting. However, notice to members is not required if emergency circumstances require action by the board before notice can be given. This law authorizes an emergency meeting of the board to discuss business or take action that cannot be delayed until the next regularly-scheduled board meeting. The minutes of the emergency meeting must state the reason necessitating the emergency meeting and must be read and approved at the next regularly-scheduled meeting of the board of directors.

Enforcement against Absentee Owners. All too often a winter-only resident leaves someone in charge of maintaining his/her lot, and the maintenance is not done frequently enough or well enough, or is not done at all. Most CC&Rs have a “self-help” provision that allows an association’s board to hire a contractor to do any needed clean-up on a lot after proper notice to the owner. Summer brings many weeds to our desert dwellings, and self-help to clean up an untended lot is usually the most economical and expedient enforcement option. Generally, the provision states that any money expended by the association becomes part of the assessment lien and can be collected like an assessment.

Maintenance issues are common on lots that have been abandoned by their owners in anticipation of foreclosure, but the lender is delaying the trustee’s sale. In this case, an association still can exercise self-help, but may have to absorb the costs because collection would have to sought from the abandoning owner.

Written by: Carolyn B. Goldschmidt
July 2013

There is no disputing that email is a convenient and easy means of communication. Many homeowners association board members email each other between meetings, to share information and to discuss Association business or governance issues.  E-mail should be used only to disseminate information and not to discuss Association business or issues. This is because emails are generally discoverable in lawsuits and because email deliberation or discussion on Association matters defeats the intent of Arizona’s opening meeting law.

Litigation

After a lawsuit is filed, each party is entitled to “discover” evidence held by the other side. This typically involves the production by each party of copies of records and other documents. In the case of a homeowners association, the pertinent records would include, among other things, correspondence to and from the board and between board members; financial records; board and owner meeting minutes; enforcement records; reserve studies; and delinquent account information. In today’s world, most of these records are in the form of emails, texts, databases and other electronically stored information (“ESI”).

It has become common practice in a lawsuit for the lawyers to focus on ESI and to diligently seek it out both prior to and after the filing of a lawsuit. Once an association’s board becomes aware that the Association has been or is likely to become involved in litigation, it has a legal obligation to preserve all evidence, including ESI.

A party’s attorney has the right to a forensic study of the hard drives of potential witnesses. This means that home computers, work computers or personal email accounts are all subject to discovery. This will invariably provide access to information, either personal or otherwise, that a board member assumed was private or confidential but is now being subject to the scrutiny of lawyers and courts. A computer technician can duplicate all information on individual computers and computer systems, including attempts to delete or change information. As a result, board members should avoid using personal email accounts to conduct Association business and should limit the content and subject matter of email communications. (Ask yourself if you would feel comfortable having a particular email read to a judge or a jury.) It is a good idea to establish a separate email address and mailbox for association business if you are a board or committee member. This is especially true if you share an email address with your spouse. Association information that you receive should be kept confidential.

It is important to remember that no matter how many times you press the “delete” button on your computer, nothing ever really goes away and it may be able to be retrieved by sophisticated software and a persistent lawyer.

Open Meeting Law

An email discussion is not a meeting. However, deliberations via email defeat the intention behind the open meeting law. This law was first included in the Arizona Planned Communities Act in 1994 to assure transparency in the operations of the association, and to give members the opportunity to hear the deliberations of the board members. If board members discuss association business issues via email, by the time they get to the board table, their minds are often made up and the deliberations are abbreviated. The less transparency in board operations, the more your members are given a basis to believe that you are hiding something. Thus, emails should be used to distribute information to prepare board members for meetings and not to decide or deliberate issues.

The only time email should be used to accomplish board business is when action is being taken without a meeting. According to the Arizona Non-Profit Corporations Act and most associations’ bylaws, a board of directions can take action without a meeting if the board unanimously agrees in writing to the action. Approval by email is written approval of the action.

Written by: Carolyn B. Goldschmidt
May 2013

I hear the wind among the trees
Playing the celestial symphonies;
I see the branches downward bent,
Like keys of some great instrument.
~Henry Wadsworth Longfellow

Neighbor Disputes

Unfortunately, trees can bring disharmony to neighbors when branches or roots encroach over or on the land of another or interfere with views. There are no statutes in Arizona that address tree encroachments; however, there is “common law” in Arizona and every other state that does. Common law comes from trial court cases that are appealed to a higher court. There is one case in Arizona that addresses tree encroachments: Cannon v. Dunn (Arizona Court of Appeals, 1985). This case establishes that Arizona follows the generally-accepted rule that a landowner who sustains injury by the branches or roots of a tree intruding from another property onto his, regardless of their non-poisonous character may, without notice to the tree owner, cut off the offending branches or roots at his property line.

If you are going to remove encroaching branches or roots from a neighbor’s tree, consider the following:

1. Start with a written request to your neighbor for help or abatement, which explains the need for tree revision (i.e., “branches drop debris that plugs up my roof drains” or “roots are breaking up my patio”).
2. If the neighbor isn’t responsive, consult with an arborist or similar expert as to the tree’s condition and advice on extent of trimming that can be safely done. Get the expert’s opinion in writing.
3. Photograph or videotape the encroachment both before and after you have trimming done.
4. Have an expert do the work.

The injured landowner may not cut the tree down or cut its branches or roots beyond the extent to which they encroach upon his/her land. Thus, a property owner aggrieved by his neighbor’s tree may not cut the tree down or cut its branches or roots beyond the extent to which they encroach upon his land.

Common mistakes that the tree challenged can make that can create exposure to a claim for damages are:

1. Pruning the tree at the top (for an increased view, light or greater exposure) can structurally harm a tree. Pruning lower branches and leaving growth only at the top can also increase the risk of a structurally unsound tree that could topple in wind or rain.
2. Cutting roots, which may solve your problem, can also weaken a tree, causing it to fall.

Tree Issues in Homeowners Associations

An Association’s Board of Directors typically is burdened by tree issues, particularly when there are a number of trees in the common area or on other areas of Association responsibility that are mature and too large for the area in which they are planted. Some of the common tree problems that face Associations are:

1. Need to remove a tree that a homeowner wants to remain. The Association generally is responsible for maintaining trees on its common areas. Oftentimes, property owners adjacent to a common area do not want a tree removed that has been providing shade and beauty to their lot. In other cases, owners want trees removed from common areas to restore their view. Many Boards of Directors find themselves in a “no win” situation – some owners are angry because the trees are not being pruned or removed and other owners are angry because they are. As with most conundrums of this nature, the Board should get expert advice, allow community input, and create a reasonable policy that is consistently followed.
2. Removing a tree because it is a liability. If a common area tree causes damage on a private lot, the Association may be liable for damage done.  Therefore, it is important for the Board to get expert advice on the health and placement of common area trees.
3. View  issues. There is no right to a view unless some promise of view protection is in the Association’s governing documents. Some CC&Rs state that trees need to be trimmed so that there is no “substantial interference with a material view” or some similar language. Many Association Boards have had to embark on a research and a public relations campaign that resulted in a policy that would meet the intent of the CC&Rs and remove the subjectivity that often is at the root of view issues.
4. Maintenance issues. In many cases, the Association is responsible for maintaining landscaping in the front yards of the private lots. When too many trees were planted during the development phase, or trees were planted in the wrong places, a Board suddenly can be faced with costly and widespread tree removal or pruning. Some Associations have taken the position that “maintaining” is not “removing and replacing”. In other cases, Associations have taken the position that landscaping maintenance does not include tree pruning or removal.

After our rainy summer, tree growth has brought some of these issues to the forefront. Unfortunately, there are no bright line rules that apply to all situations. A Board of Directors needs to study the pertinent governing documents, consult professionals, be fiscally prudent and enter into conversations with community members to establish a sound tree policy.

Written by: Carolyn B. Goldschmidt
October 2012

Federal and State Fair Housing laws mandate equal access and opportunity in housing, and these laws apply to homeowners associations (HOAs). In general, the Americans with Disabilities Act (ADA) does not apply to HOAs because they typically are not places of public accommodation. Rather, HOAs govern and/or own private property that is used and enjoyed by residents and their guests. The ADA requirements for improvements that are accessible to disabled persons are imbedded in current Pima County building codes. However, communities that were built before the applicable provisions of the building code went into effect are exempt from having to meet ADA standards in their common areas. If major renovation is undertaken in a clubhouse, for example, the ADA standards would have to be followed in conjunction with other applicable building codes.

In Arizona, the Fair Housing Act is designed to protect against discrimination in the sale or rental of a dwelling, or in providing services or facilities in connection with the sale or rental on the basis of age[1], race, religion, national origin, gender, disability, or familial status [A.R.S. §41-1491.14]. A reader of this newsletter has recently encountered difficulty in representing a potential buyer, who is in a wheelchair. The buyer’s housing needs would be best met by living in a condominium or townhouse. The Realtor© located several dwelling units that might have been suitable for the buyer; however, the common area sidewalks did not afford acceptable access. The concerned Realtor© is wondering whether an HOA is required to make or allow needed adaptations.

The obligations of an HOA to disabled persons are to make reasonable accommodation and to allow reasonable modification. Thus, an HOA needs to make reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling [§3604(f)(3)(B) of the Federal Fair Housing Act, Title 42 of the United States Code]. Examples of reasonable accommodations are: the use of a motorized scooter in an area where motorized vehicles generally are not allowed; the keeping of an assistive pet or an emotional support pet when an HOA has a “no pet” restriction; assignment of a parking space near a resident’s dwelling unit to accommodate his limited mobility; allowing parking of a disabled person’s vehicle in an area where parking or parking of the particular type of vehicle is prohibited.

A reasonable modification is a structural change made to existing premises, occupied or to be occupied by a person with a disability, in order to afford such person full enjoyment of the premises.   Reasonable modifications may include structural changes to exteriors of dwellings and to common and public use areas. Under the Fair Housing Act, the HOA must allow the modification, but the unit owner or resident is responsible for paying the cost of the modification. Thus, a resident must be allowed to install a ramp outside his building in a common area; however, the resident must pay the expense of installation and must get approval from the Association before the modification is made.   The request cannot be denied, however, unless there is some aspect of the request that is not reasonable.

In some cases, an HOA may be willing to bear the expense and follow the procedure required by the local municipality to install a curb cut for handicap access in common areas. Therefore, if a disabled person needs a reasonable modification that may benefit others in the community, the person should request the HOA Board to undertake the work at the Association’s response.

Other issues that arise under the Fair Housing Act are:

1. What kinds of information may an HOA request from a resident with a disability in support of a requested reasonable modification or accommodation?
2. Who qualifies as a person with a disability under the Act?
3. If an HOA’s CC&Rs prohibit the operation of a business, can an owner operate an elder care home or other type of group home in the community?
4. In an age restricted community, does an age restriction violation have to be allowed if the underage person is rendering care to a disabled occupant of the dwelling unit?

Further information about compliance with the Fair Housing Act can be found on the website of the Southwest Fair Housing Council http://www.swfhc.com, a local organization that provides information and assistance for housing issues that pertain the Fair Housing Acts.

[1] Age-restricted communities that meet the requirements for an exemption under the Fair Housing Acts may discriminate on the basis of age.

Written by: Carolyn B. Goldschmidt
February 2012