HOA LAW
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 Owner 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)
