You may recall that last year I told you about
how homeowners' associations enforce their rules,
using as an example the story of an elderly
woman in Glendale who lost her house in a foreclosure
by her homeowners' association. Now there is
a reported case in Tucson that provides another
example of homeowners' association rules and
how they are enforced. The case also demonstrates
how those rules can interact with other rules
governing property, in this case the Fair Housing
Amendments Act (the "FHAA"). Once
again, the case provides a demonstration of
how homeowners' associations enforce their rules,
and how not to respond when you get into a dispute
with your homeowners' association.
The homeowners' association in the Tucson case
has a rule that prohibits parking of recreational
vehicles in the subdivision. There is an exception
for parking an RV in a garage or other enclosure.
As is usually the case, the association has
the authority to get a court order to enforce
its rules (in this case requiring removal of
an RV that is not parked in a garage). The association
received a complaint about an RV parked on a
homeowner's property, notified the homeowner
that the RV had to be removed or parked in a
garage, and filed a lawsuit when the homeowner
continued to park the RV on the homeowner's
property.
This is where the Tucson case takes a turn
that distinguishes it from the Glendale case.
The homeowner in the Tucson case claimed that
the RV was necessary to accommodate the residents
of the elder care facility he operates on the
property, and that since the FHAA requires "reasonable
accommodations" in the enforcement of rules
when such accommodations "may be necessary
to afford [the residents] equal opportunity
to use and enjoy a dwelling," the association
could not prevent him from parking his RV on
the property. A good argument, except the homeowner
didn't convince the judge that allowing the
RV to be parked in the driveway instead of in
an enclosure was a "necessary accommodation."
The judge decided the homeowner would have to
prove that it was unreasonable to make him build
an enclosure for the RV. The homeowner didn't
present any evidence that the cost of an enclosure
would be prohibitive, so the judge ruled that
no accommodation was necessary in the enforcement
of the association's rule. In other words, the
homeowner has to either build an enclosure or
park the RV at a storage lot.
Although there has been some discussion of
possibly increasing government regulation of
homeowners' associations, or adding new laws
limiting associations' powers, the association
in the Tucson case, like the one in the Glendale
case, apparently did not do anything outside
of what a typical homeowners' association can
do to enforce its rules. There are state laws
that limit the actions of homeowners' associations
in imposing fees (including fines for rules
violations) and in enforcing liens for unpaid
fees. All homeowners' associations are required
by Arizona law to provide a statement of the
amount of any unpaid fees upon the request of
the homeowner. All homeowners' associations
are also prohibited by Arizona law from enforcing
any lien more than three years after the unpaid
fees became due. And Arizona law limits the
amount that homeowners' associations can charge
for late payment of fees.
Contrary to the perception that homeowners'
associations are a shadow government foisted
on unsuspecting homeowners, the existence of
a homeowners' association, its rules, and its
powers of enforcement, are all disclosed to
a prospective home purchaser when a document
commonly called the CC&Rs (for "Covenants,
Conditions and Restrictions") is provided
to the prospective purchaser with the preliminary
title report. The Seller's Property Disclosure
Statement, and the Subdivision Public Report
in new subdivisions, also provide information
about the association and its impact on the
property.
Another misconception fostered by the criticism
of homeowners' associations is the notion that
they are ubiquitous. The fact is that very few
older subdivisions have associations with enforcement
powers, even those older subdivisions that have
CC&Rs in place. The proliferation of homeowners'
associations is probably more associated with
the spread of subdivision common areas rather
than CC&Rs. Subdivision common areas are
those areas found in most new subdivisions that
are not part of any individual lot but that
are not owned by the local government. The common
areas can be as limited as the landscaped area
around the subdivision entrance or as extensive
as the streets throughout the subdivision. Maintaining
those common areas (using the association fees
paid by all of the homeowners in the subdivision)
is the primary function of most associations.
The common areas may make the subdivision more
attractive, but having them necessitates the
creation of a governing body to maintain them.
If you buy a house in such a subdivision, you
are knowingly entering into an agreement to
live by the rules establishing the common areas
and the association, i.e. the CC&Rs.
As for the Tucson case being another example
of how not to respond when you get into a dispute
with your homeowners' association, when the
homeowner first received notice that he was
violating the RV parking rule, he began parking
his RV at a storage lot. He later resumed parking
it on his property, then claimed that he couldn't
afford to build a garage, which he said would
cost $30,000 to $40,000. He probably could have
avoided the dispute to begin with, and probably
could have come up with a much less expensive
enclosure that would satisfy the association
rules. I have seen an RV parked in a yard under
a metal roof that extends down to the top of
a block wall surrounding the yard, so that all
you can see of the RV is the front and back.
It is certainly not attractive, but it would
probably fit the association's rules unless
the rules also prohibit metal roofs (as some
do). The homeowner would almost certainly have
been in a better bargaining position with the
association if he had made some effort to hide
the RV from the view of his neighbors.
Homeowners' associations are here to stay, and
do perform the function of maintaining the common
areas that make many modern residential communities
more attractive. Some homeowners' associations,
like the ones in the Glendale and Tucson cases,
will go to considerable lengths to enforce their
rules. If you would prefer to not live under
rules telling you where you can park your RV
(or park your car, or what color you can paint
your house or your mailbox, to cite examples
I have seen in CC&Rs recently), you can,
as a home buyer, vote with your feet by choosing,
as my family did, to buy a house in a neighborhood
with no formal association.
NEW TRUST LAW IS ON HOLD FOR NOW
I have promised some of you a special report
on new Arizona law governing trusts. You may
have heard that earlier this year, the Arizona
Legislature adopted the Uniform Trust Code,
to take effect January 1, 2004. As a result
of the recent special session, however, you
can forget about it for now. The Legislature
decided to delay the effective date of the Uniform
Trust Code in Arizona in January 1, 2006. They
will probably make some changes to it before
the effective date. They may even change their
minds altogether and decide not to adopt it
at all.
