Over the past few months, our law firm has seen an increase in the number of petitions being filed with the Arizona Department of Real Estate (ADRE) against HOAs/condos for alleged violations of CCRs or state law. Here’s a quick overview of the ADRE process and some tips for HOAs/condos in this situation now or in the future.
In 2011, the Arizona Legislature passed a law which gave Arizona HOA/condo owners an inexpensive administrative alternative to resolve disagreements with their HOA/Condo. In 2016, the Arizona Legislature passed additional legislation moving this dispute process to the Arizona Department of Real Estate (ADRE) for oversight. Here’s a link to this legislation: Link to legislation
Under this legislation, Owners who have disagreements with their HOA or condo can file a petition with the ADRE and have their concerns quickly heard by an administrative law judge at a hearing. Here is a quick overview of the petition process:
- All petitions must be in writing on the form approved by ADRE. Click here for a copy of the form.
- Only an owner or association may petition the ADRE for a hearing.
- An owner’s petition must be regarding a dispute between the owner and the association. (Note: a petition cannot be filed against an individual or individual board member). An association’s petition must be regarding a dispute between the association and the owner.
- The ADRE will not accept petitions filed by or against renters, non-owners, directors, representatives, other homeowners or community management companies.
- An incomplete or inaccurate petition cannot be processed, and will be returned to Petitioner.
In order to file a petition, the following FEES must be paid by the person filing the petition:
- A single issue complaint is $500.
- Each additional issue complaint is $500. (Maximum of four total issues or $2k)
- Payment may be made by credit card online through the Message Center link or by check or money order to the Arizona Department of Real Estate. (Please note that when paying online you will be sent a link for payment after your petition is received by ADRE.)
- Filing fees are NON-REFUNDABLE, except when the petition is dismissed at the request of the petitioner before a hearing is scheduled, or by stipulation of the parties before a hearing is scheduled. A.R.S § 32-2199.01 (B).
The ADRE has a helpful brochure that outlines how this HOA/Condo dispute process works. A copy of this BROCHURE can be found by clicking here.
What should an HOA/Condo do if they receive a petition in the mail from an owner?
- Act promptly because there are important deadlines in these petitions! Please contact Beth Mulcahy, Esq. at firstname.lastname@example.org to discuss the HOA or condo’s legal options as soon as you receive the petition in the mail. The HOA or condo must respond to the complaint in a timely manner (the due date for the response will be listed in the petition).
- We strongly suggest that either our firm or your insurance company’s attorney prepare a response and attend the hearing on behalf of the association.
- As soon as possible, the merits of the petition and a strategy regarding the petition should be discussed by the board and legal counsel and put into place. Sometimes, the issue can be settled quickly with good communication with the owner. Sometimes the ADRE will dismiss the petition on its merits after receiving a motion to dismiss. And sometimes, there is a full-blown 3-4 hour hearing on the matter with all parties (usually within 60-120 days) to decide the case.
Mulcahy Law Firm, P.C. has successfully helped many associations through this ADRE complaint process and we are here to help your HOA/condo if you need us!