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Home Owners Association Disputes

Breach of Contract Litigation:   In Arizona, the Declaration is a contract between the Unit owner and the Association.    Powell v. Washburn, 211 Ariz. 553, 554, 555, ¶ 8, 125 P.3d 373, 374, 375 (2006).  When a contract is clear, the court will enforce it according to its unambiguous term and the intent of the parties. Courts will consider the particular meaning of a restrictive covenant and "the surrounding circumstances, the general purpose of the restrictions, and the manner in which they have been interpreted by the property owners." Id. (citation omitted).  Even if the covenant is ambiguous, the court advised that “The function of the law is to ascertain and give effect to the likely intentions and legitimate expectations of the parties’ who create the covenants.” See id. at 556-57, ¶ 13, 125 P.3d at 376-77.

The Association draws its authority through the provisions of the Covenants, Conditions and Restrictions.  If the Unit owner or the Association ignores or otherwise acts outside the specific terms of the CC&Rs, then the Unit owner or the Association may be found in breach of contract.  In that case, the prevailing party may recover damages and attorneys fees from the losing party.

Neighbor and Noise Disputes:  In most condominium and homeowners associations, the Declaration specifically allows one homeowner to use the Association's Declaration to proceed against his or her neighbors under a breach of CC&Rs.  For example, in a standard Declaration, the community documents often allow that a Unit Onwer may enforce the CC&Rs against another Unit Owner.   This is important in noise and nuisance disputes because the Unit Owner may sue for breach of contract and recover attorneys fees.

In absence of such a provision, the owner may still bring an action against its unruly neighbor under a Nuisance theory. A private nuisance is an interference with a persons interest and enjoyment of real property.  If a person unreasonably interferes with another's use and enjoyment of the land, then that person may bring an action against their neighbor under this theory.   

Wrongful Assessments:  The CC&Rs often provide specific regulations for how much money is owed.  However, the Association sometimes becomes a little overzealous in their collection efforts. There are particular regulations that the Association must observe.  In fact, pursuant to A.R.S. 33-1807, the association's ability to assess is specifically defined.  Moreover, the Unit Owner must observe specific provisions if it wishes to dispute an assessment. 

Breach of Fiduciary Actions against Property Managers and HOA Directors:  Most property managers and directors do a great job of working for the community. In Arizona, an officer, director, or property manager has a duty to act in good faith, act without a conflict of interest, and act in the association's best interests.    However, sometimes those in the fiduciary responsibility do not follow these simple rules;  sometimes, these individuals embezzles money, make decisions in that hurt the community and so on.  In so doing, these individuals expose themselves to personal liability.  Warne Inv., Ltd. v. Higgins, 219 Ariz. 186, 197, 1 51, 195 P.3d 645, 656 (App. 2008) 

Construction Disputes

Construction defect mass-actions:  In Arizona, homeowners have eight years to sue the builder for latent defects discovered in the home.  These defects are far reaching but are often the product of deficient construction.  These homes often show signs of resultant damages as a result of the deficient construction.  For example, continuous water damage from a poorly installed window will show signs of water damage below the window.  Thus, the window installer's insurance company will pay to resolve this dispute.  Knowing the interplay between construction and insurance companies is critical to successfully and quickly resolving a construction defect dispute.  If you wish to speak with a construction defect attorney, please call us today!

Construction delay actions:  Construction schedules are very exacting.  The general contractor hires a framer for two days.  After those two days are up, the framer has booked itself for other jobs.  However, in many cases, construction gets delayed.  As a result, the framers cannot come back to your project for weeks or, in some cases months.  As a result, lawsuits often arise as a result of certain delays to the construction project.  Indeed, in many cases, the parties point fingers and assign blame.  However, wise counsel will see through these games to provide you with guidance and help you through these disputes.

Wrongful lien and lis pendes filings:  In Arizona, a contractor may not file a lien against a property that it knows to be invalid.  In fact, a contractor faces a $5,000 fine or three times the actual damages for filing a wrongful lien.  A lien is wrongful if the owner knew it was invalid or groundless at the time it filed the lien.  For example, if the contractor failed to deliver a 20-day preliminary lien notice, then the lien is invalid pursuant to A.R.S. 33-992.01.  Thus, if the contractor files a lien without delivering a 20 day preliminary lien notice, then by statute, the lien is invalid and the contractor will have to pay contract and attorneys fees for filing an invalid lien.

Scope of work disputes:  The registrar of contractors requires that contractors define its work with reasonable particularity.  If contractor fail to do this, then they may get in a dispute with the customer over the scope of work.  In fact, the contractor may also lose a breach of contract / collection case if it failed to define what work it is doing in the first instance.  Thus, it's important for contractors to provide a detailed and itemized list of what they are doing.  That way, the contractor may make specific reference to what it agreed to do, and what it did not agree to do. 

Registrar of contractor complaints: The Registrar of Contractors handles complaints against construction companies.  Sometimes, the complaint is as simple as the ROC number does not appear on the contractor's advertisements, emails, and so on in violation of Arizona law.  Other times, the contractor's work is deficient, resulting in a workmanship complaint. 

Importantly, an owner-occupant of a home may make a claim against the Registrar of Contractors recovery fund and against the contractor's bond if they are an injured person as defined by statute and if they have workmanship issues related to the property.   The requirement to obtain a contractor's bond are somewhat technical and cumbersome.  Having an attorney help you through this process is recommended.

Real Estate Disputes

Non-Disclosure Prosecution and Defense:  Every day, sellers and buyers engaged in contract negotiations.  The seller offers to sell the property for a certain price, and the buyer offers to pay that price.  However, the transaction is often contingent on certain warranties, repairs, and so on.  Specifically, the seller has an obligation to disclose anything that may reasonably impact the compensation to be paid by the buyer.  If the buyer fails to list problems that it knows about, then it can be sued for this non-disclosure.  Similarly, if the real estate agent has a red flag, and fails to investigate the same, then it may be sued for failing to disclose information that it knows or should know about.

Department of Real Estate complaints:  A.R.S. 32-2153 and A.A.C. R. 4-28-1101 generally provide the professional duties of agents.  However, these duties are sometimes easier in principal than in application.  In many instances, the agent may find itself in hot water for misrepresenting the terms of the transaction, for not disclosing a septic system, and so on.  If you are confronted with a department of real estate complaint, please call the firm immediately.

Quiet Title and Slander of Title Complaints: In Arizona, quiet title lawsuits are governed by A.R.S. 12-1102 and 1103.  A.R.S. 12-1102 explains the specific parameters for the complaint.  Moreover, A.R.S. 12-1103 provides the specific parameters for obtaining attorney's fees for a quiet title action. 

Moreover, if the owner files a lien or clouds title when it knows that it does not have an interest in the title, then the owner may file a lawsuit for slander of title.  However, slander of title suits are difficult, because these claims generally require a showing of malice on the part of the party that is clouding the title. ​