Directors sometimes question whether they are using their rulemaking authority appropriately. To make sure they are not abusing their authority, directors should ask two questions when considering proposed rules:

1) Does this rule complement the CC&Rs?

2) Is this rule reasonable?

Directors should look to the association’s CC&Rs for direction on rulemaking. CC&Rs nearly always describe how to amend or add rules; and boards can make rule changes that do not conflict with the CC&RS or other controlling documents. While rules that complement CC&Rs are typically reasonable, this is not always the case.

When determining whether a rule is reasonable, directors can ask, “Is this rule something that a reasonable person in my shoes would do?” If the answer to this question is yes, then the rule could be enforceable. If there is any doubt, however, directors should consider whether perhaps there is a better way to pursue the community’s agenda. The following examples illustrate rules that have been found reasonable:

• A board can enforce dog leash laws in its park so that other members can be safe from dog attacks.

• A board can set reasonable speed limits on private roads to keep the community safe; and can impose fines for speeding violations.

• A board can fine homeowners for parking on the street for too long as a way to help keep streets clear for emergency vehicles and other drivers.

Arizona HOAs’ responsibility to maintain safety in the community’s common areas is multi-faceted.  This responsibility includes keeping the areas free of hazards and unsafe structures, as well as taking measures to keep community members safe from dangers such as unleashed dogs.  It is widely accepted knowledge that dogs sometimes behave erratically.  Arizona HOAs that do nothing to protect community members from being bitten by a dog in a common area can be held liable for damages.

If a dog attacks somebody in a community’s common area, of course the dog owner is primarily liable.  However, certain circumstances may extend liability to also include the HOA.  For instance, HOAs that knowingly turn a blind eye to leash laws may be held liable to dog bite victims.  In addition to contacting law enforcement agencies, dog bite victims should contact an experienced attorney to discuss the particulars of their situation.

Arizona HOAs’ responsibility to maintain safety in the community’s common areas is multi-faceted.  This responsibility includes keeping the areas free of hazards and unsafe structures, as well as taking measures to keep community members safe from dangers such as unleashed dogs.  It is widely accepted knowledge that dogs sometimes behave erratically.  Arizona HOAs that do nothing to protect community members from being bitten by a dog in a common area can be held liable for damages.

If a dog attacks somebody in a community’s common area, of course the dog owner is primarily liable.  However, certain circumstances may extend liability to also include the HOA.  For instance, HOAs that knowingly turn a blind eye to leash laws may be held liable to dog bite victims.  In addition to contacting law enforcement agencies, dog bite victims should contact an experienced attorney to discuss the particulars of their situation.

Arizona law distinguishes liens and foreclosure actions for assessments from unpaid fines.  Assessments are the dues that HOAs charge homeowners to maintain the community.  When homeowners fail to pay their assessments, HOAs have an automatic lien against their home.  This means that Arizona HOAs do not have to record a lien for unpaid assessments because the lien already exists.  However, this generally does not mean that HOAs can foreclose on a home because a homeowner misses one payment.  Arizona law requires associations to wait for one year, or until the unpaid amount reaches $1,200, before foreclosing on a home.

Fines are penalties that HOAs charge homeowners for violating CC&Rs.  Unlike unpaid assessments, Arizona HOAs do not have an automatic lien against a home when homeowners fail to pay a fine.  A common reason that homeowners receive fines is for failing to keep their yard properly maintained.  Before an Arizona HOA can record a fine lien, it must successfully sue the homeowner in court.  HOAs that try to issue a fine lien without proper court authority can be held liable for $5,000 or more.  Also, even if the HOA prevails in court, it cannot evict homeowners for fine liens.

Paying assessments on time and abiding by the CC&Rs can help Arizona homeowners avoid assessment and fine liens altogether.  Homeowners whose’ HOA does place a lien on their home need to resolve the issue with their HOA to prevent foreclosure.  A qualified attorney can help determine first whether the lien is valid, and second what needs to be done to release the lien from the home.

When homebuyers purchase a home in a HOA, they agree to abide by the terms of the community’s CC&Rs.  Homeowners in a HOA become contractually bound to follow the rules outlined in the CC&Rs, including those pertaining to how rules may be changed.  While most CC&Rs outline how rules can be changed, this process can differ from community to community.

Some Arizona HOAs require a majority vote from the membership before the HOA can change any rules.  This provides a means for every member of the association to discover the proposed change and then have an influence over whether or not the change is enacted.

On the other end of the spectrum, some Arizona HOAs allow the board to change HOA rules without first consulting the membership.  These HOAs generally have their attorneys review the CC&Rs periodically to make sure the rules are not outdated.  HOAs only have implied authority to make rules that protect the common area. Also, any rule making must not conflict with the community’s CC&Rs.

Homeowners can take some consolation in the fact that Arizona law prohibits HOAs from abusing their authority.  Even HOAs with authority to unilaterally change the rules are prohibited from acting unreasonably.  Mesa homeowners who believe their HOA board is not acting in the community’s best interest should consult with an attorney about the matter.  Courts will strike down rule changes that they find unreasonable, arbitrary or capricious.

Under the old administrative procedure, homeowners filed petitions with the Department of Fire, Building and Life Safety (DFBLS) for an administrative ruling.

An administrative law judge would set a hearing, and issue a ruling within 2-3 months.  This saved time and money, but it turned out to have its own set of problems.  In the end, the court ruled that the administrative process was unconstitutional.  As of January 2009, the administrative process has been removed as an option for Arizona homeowners and HOAs.

This fairly recent change in procedure means that at least for now, Arizonans cannot handle HOA disputes with an administrative process.  Rather, most serious disputes must be handled in court.  An attorney experienced in HOA law can be instrumental in helping homeowners navigate the process and resolve their dispute appropriately.

Supporters of transfer fees generally argue that they are important for developing a reserve fund for the community.  These funds are frequently drawn from to pay for unexpected repairs.  Revenues generated from transfer fees can be used to repair and maintain common areas and association property, and even make additions approved by the HOA.

Opponents to transfer fees view them quite differently.  Regardless of the benefits that transfer fees may provide, opponents argue that transfer fees make it difficult for members of the community to sell their homes.  This problem, they argue, outweighs any advantages that transfer fees provide for the community.

These competing perspectives have made transfer fees the topic of many legal discussions in Arizona.  In court battles where transfer fees have been disputed, courts tend to allow them as long as they are authorized in the CC&Rs and they are reasonable

Checking the CC&Rs for authority to charge transfer fees is simple enough, but sometimes what is “reasonable” is not so easy to determine.   What is reasonable in one community may be entirely unreasonable in another.  The reasonableness test is subject to factors such as the value of the home and the number of amenities that the association offers.   Communities that are more expensive to buy in and that offer upscale amenities may charge a higher transfer fee than communities that require little maintenance.

If the transfer fee is indeed reasonable and the CC&Rs permit transfer fees, then the HOA is permitted to charge it even if it restricts homeowners’ ability to sell their home.

The one problem with SEDs, however, is that many people find them unattractive or unsightly.  This is generally not the case when they are installed on a rooftop, but it is not unheard of for homeowners to mount them to stand-alone towers on their property.  And most homeowners do not want this type of structure in their neighbors yard.  To prevent members of their community from building these structures, Arizona homeowners can call on their HOA.

Homeowners can petition their homeowners’ association to create and enforce a wide range of rules and restrictions.  HOAs can then enforce restrictions, or even add new provisions to the community’s CC&Rs.  However, despite the latitude that HOAs have, federal statute prohibits them from restricting homeowners from installing SEDs.  Nevertheless, HOAs can adopt reasonable rules about where on a homeowner’s property SEDs can be installed.  As long as a HOA rule does not impair the function of the SED, or make it cost-prohibitive for homeowners to install a SED, the HOA can regulate where a SED can be installed on a homeowner’s property.

To sum things up about how HOAs can regulate solar panels, an association can ban stand-alone towers as long as it does not interfere with the SED’s efficiency or make it more costly for homeowners to install SEDs.

Not too long ago, a Mesa police officer complained about CC&Rs that prohibited him from parking his patrol car in his driveway.  While extreme CC&Rs are not unheard of in Mesa, the law actually forbids restrictions that go too far.  For instance, Arizona HOAs cannot restrict public servants from parking their marked vehicles on their driveway or street.  This means that any CC&R provision prohibiting this is invalid.

This does not mean that all public servants are immune from CC&R restrictions, however.  Arizona law only forbids parking restrictions in limited circumstances.  First of all, to fall under the law’s protection, the homeowner must work for a public service corporation that is regulated by the corporation commission or a municipal utility.  Secondly, the homeowner must be required to use the vehicle in question to respond to “emergency deployments and equipment for repair or maintenance of natural gas, electrical, telecommunications or water infrastructure.”  Also, the vehicle must have an official emblem or otherwise be visibly marked as a public service or utility vehicle, and weigh less than ten thousand pounds.

If all of these requirements are satisfied, then an Arizona HOA cannot prohibit the homeowner from parking the vehicle on the street or driveway.