Last month I met with Arizona’s Real Estate (ADRE) Commissioner Judy Lowe, Deputy Commissioner Louis Dettorre, and Constituent Manager, Dan Gardner to discuss what ADRE can do to help homeowners buying and living in HOAs. As many may not know, ADRE’s involvement with HOAs increased with the 2016 re-assignment of HOA dispute processing by OAH.
Among other things, we discussed 1) a clarification of the OAH costs that warrant the $500 filing fee, and 2) ADRE’s listing of CAI and AACM (HOA managers association, a split-off from CAI in 2003) on its web page as resources (subject of another Commentary in the works).
Regarding OAH fees, with which the Commissioner had some concerns, from the very beginning in 2006 OAH was to operate on a cost recovery basis. The initial fee was set at $500 with later reviews. The Commissioner has the authority to change the fee. (Many of the cases were filed by homeowners, mostly without an attorney.)
The requirement for this fee stemmed from the fear mongering of the special interests who claimed that the courts and OAH would be swamped with complaints. It seems that the alleged 95% good people now have turned, in a NY minute, to 95% bad people.
After 11 years in operation, we find that HOA petitions (54) amount to an insignificant .8% of all 5,251 OAH cases as reported in OAH’s 2016 report. Is the $500 fee justified? Consider that many of the extended cases are the result of actions initiated by the HOA attorney, which would drive up the costs of HOA claim processing. Also, OAH states that it is seeking a standard average charge-back cost to all agencies of approximately $174. Something doesn’t add up!
In response to my Public Records request, OAH provided the following data on the costs of HOA dispute processing:
OAH FYE June 2017 totals
524 hours spent on 54 cases, or 9.7 hours per case
$36, 069 spent on 54 cases, for an average cost of $668 per case. The first half -year cost came to $750 per case, and $607 per case for the second half-year.
In addition to the hourly fees, there is an agency “flat filing fee,” sort of an overhead fee, charged to ADRE in the approximate amount of $175, which appears to be the charge-back fee mentioned above.
The Superior Court (Maricopa County) fee for filing a complaint is just $322. Why does it cost more for OAH to handle HOA claims than for Superior Court?
After 11 years, it’s time for a thorough review of the statutes relating to HOA fees. HOA homeowners are not getting a fair deal as set forth in the 2011 statutes reviving OAH handling of disputes. It required (Sec.4, Legislative Findings and Intent, AZ Sess. L. Ch. 185),
[O]wners are often unable to afford the cost of formally litigating their disputes in the superior court. . .. [OAH] will provide an important consumer protection for owners . . . without the expense, formality and difficulty of requiring a trial in the superior court in every instance . . ..”
By law, today, the ADRE Commissioner sets the filing fee for HOA disputes. I am hoping that the Commissioner will set things right and propose legislation to address this gross injustice suffered by the good people living in HOAs.
Homeowners can play a significant role by speaking out and addressing this matter to Dan Gardner (dgardner@azre.gocv). Arizona homeowners must act now!
HOA Constitutional Government 
I will definitely do my part and address the matter with Dan Gardner. Last year CAI presented it position that the prevailing party be entitled to have their costs reimbursed. Did this become law?