The Arizona legislature has established a process for Arizona homeowners and homeowner associations, condominium associations, and planned community associations (HOAs) to resolve disputes that may arise between them and the owners. Although this form of dispute resolution is available in all cases involving HOAs, it remains an optional alternative to more traditional resolution through the civil court process.
How the HOA Dispute Process Works
The HOA Dispute Process resides within the Arizona Department of Real Estate (ADRE). Under A.R.S. Title 32, Ch. 20, Art. 11, owners or HOAs may initiate the dispute process by completing and submitting a petition for a hearing. All petitions must be on the ADRE’s official HOA Dispute Process Form. This process is available only for disputes between owners and HOAs, not individuals or individual Board members of HOAs. Your complaint must allege a violation of at least one of the following:
- Condominium statutes
- Planned community statutes
Furthermore, your complaint must provide a specific reference to the statute, bylaw, or CC&R at issue.
You also must attach one copy of any condominium or planned community documents that relate to your dispute. You can submit your petition and supporting documents online or by mail.
Whichever party files the petition must pay a $500 filing fee per single issue that is generally nonrefundable. The only exception is when the petitioner dismisses the petition or the parties agree to dismissal before a hearing is scheduled. A petition may address up to four individual issues, each requiring payment of a separate filing fee. You may enclose your filing fee with your petition or pay it online via a secure link provided by ADRE.
After a petition is filed, the ADRE will mail a copy of the petition and a notice of the need to respond to the other party by certified mail. The other party then has 20 days to respond to the petition. If the other party fails to respond to the petition, the ADRE Commissioner assumes that they are admitting the allegations and shall enter a default decision against that party.
The ADRE will refer the case to the Arizona Office of Administrative Hearings (OAH) if the issue remains unresolved. OAH then schedules a hearing before an administrative law judge (ALJ) within 60 days of the referral date of the case.
The decision of the ALJ is enforceable by either party through contempt of court proceedings. Additionally, either party can seek judicial review of the ALJ’s order according to law.
Filing a Petition for Rehearing
Once the ALJ issues a decision, that decision is binding on the parties unless a rehearing is granted. A person who disagrees with the ALJ’s decision can request a rehearing by filing a written petition for rehearing with the ADRE Commissioner. The Commissioner then has ten days to serve the other party with the request for rehearing.
The filing of a petition for rehearing automatically suspends the ALJ’s decision. Furthermore, if the Commissioner grants the petition for rehearing, the ALJ’s decision remains suspended pending the decision upon rehearing. Whether the Commissioner grants or denies the request for rehearing, the decision shall include an explanation for the specific grounds and reasons for its action on the request for rehearing.
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