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Subject: HOA Governing Rules
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DebW3
(Arizona)

Posts:12


01/05/2020 5:03 PM  
I am so confused by which rules we are to follow. In 2015 the board filed an amended "Articles of Incorporation" which when I read it states "Amended and Restated Articles of Incorporation of GVCCVII Property Owners Association, INC. (the "Association"). Article II Defined Terms Capitalized terms used in these Articles without definition shall have the meanings specified for such terms in the Arizona Planned Communities Act. A.R.S. 33-1801, et seq., and the Declaration of Covenants.

However our Board has told us we are not governed by 33-18** as we are a non profit "Property Owners Association" and therefor governed by 10-**.

How can I find out which one is the one we follow?
AugustinD


Posts:2411


01/05/2020 5:20 PM  
A.R.S. Title 10 in its entirety is the Arizona Nonprofit Corporation Act. Nationwide, all or nearly all homeowners' associations are nonprofit corporations subject to their state's respective nonprofit corporation statutes. At the same time, in many states condominium associations and homeowners' associations may be subject to a second, separate statute. E.g. for Arizona Condominiums, Arizona has the "Arizona Condominium Act," ARS Title 33, Chapter ___.

If someone at your HOA said something like, "Our HOA is a nonprofit corporation subject to ARS Title 10. Therefore, the HOA is not subject to any of the Planned Communities Act," then I would object to their reasoning. The HOA might be subject to both.

In my experience the opening pages of a HOA's Declaration state whether a HOA is subject to specific statutes. Does your HOA's Declaration say anything?
AugustinD


Posts:2411


01/05/2020 5:27 PM  
DebW3, consider skimming the following: http://www.carpenterhazlewood.com/wp-content/uploads/2017/10/CHDB_AZ_Statute_Book_2017-18.pdf . This law firm will likely happily give you a hard copy of this as well.
DebW3
(Arizona)

Posts:12


01/05/2020 6:16 PM  
AustinD; Thank you for your reply. I just looked at the Declaration pages and my copy is not signed or filled in as far as dates when filed so I am not sure I have the most recent copy. However when I looked in the pages that I do have, there is no mention of what subsections we are to be governed by. The only place I found that actually says anything about governing was in our articles of incorporation and it states 33-1801 et. seq. That is on Arizona Corporation Commission website. The board tells us we are not governed by those. We have to follow 10 not 33.
DebW3
(Arizona)

Posts:12


01/05/2020 6:23 PM  
Thank you for your reply. I am new here so I tried to reply to your message but I messed up. I just checked our Declaration pages and there is no mention of any ARS titles. I am going to browse thru the website you sent me, but again I will be confused because our boards states that we are NOT a planned community therefore we are not under ARS 33. They say we are governed by ARS 10 and they don't have to get voters approval for things because they have all the power to make decisions within the 5 person board. As long as 3 of them decide, it is done.
AugustinD


Posts:2411


01/05/2020 6:39 PM  
DebW3, do you pay an annual assessment to this nonprofit corporation? Are there common areas, like a park, roads, or front yards, that the corporation maintains? If so, these are strong signs that your board is lying to members. Also the Arizona Planned Community Act itself appears to indicate that it applies to your community:

"33-1801. Applicability; exemption
A. This chapter applies to all planned communities.
B. Notwithstanding any provisions in the community documents, this chapter does not apply to any school that receives monies from this state, including a charter school, and a school is exempt from regulation or any enforcement action by any homeowners' association that is subject to this chapter. With the exception of homeschools as defined in section 15-802, schools shall not be established within the living units of a homeowners' association. The homeowners' association may enter into a contractual agreement with a school district or charter school to allow use of the homeowners' association's common areas by the school district or charter school.
C. This chapter does not apply to timeshare plans or associations that are subject to chapter 20 of this
title.

33-1802. Definitions
In this chapter and in the community documents, unless the context otherwise requires:
1. "Association" means a nonprofit corporation or unincorporated association of owners that is
created pursuant to a declaration to own and operate portions of a planned community and that
has the power under the declaration to assess association members to pay the costs and
expenses incurred in the performance of the association's obligations under the declaration.
...
4. "Planned community" means a real estate development that includes real estate owned and
operated by or real estate on which an easement to maintain roadways or a covenant to maintain
roadways is held by a nonprofit corporation or unincorporated association of owners, that is
created for the purpose of managing, maintaining or improving the property and in which the
owners of separately owned lots, parcels or units are mandatory members and are required to
pay assessments to the association for these purposes. Planned community does not include a
timeshare plan or a timeshare association that is governed by chapter 20 of this title or a
condominium that is governed by chapter 9 of this title."
AugustinD


Posts:2411


01/05/2020 6:41 PM  
Posted By DebW3 on 01/05/2020 6:23 PM
They say we are governed by ARS 10 and they don't have to get voters approval for things because they have all the power to make decisions within the 5 person board. As long as 3 of them decide, it is done.
Even if the Planned Community Act ARS 33 does apply to your community, at a matter of law most board decisions do not require membership approval.
DebW3
(Arizona)

Posts:12


01/05/2020 7:24 PM  
AugustinD, we do not have any common areas. Well, except for the entrance to the subdivision. The roads are county and so are the alleys. I was told once again today that we are not a Planned Community, we are a Non Profit Corporation. I don't understand that logic at all since this community was developed by a Real Estate Developer/builder. I think they planned it but who knows? Rumor has it that the developer had planned to have two subdivisions with a shared area between them for community pool and clubhouse, but he went bankrupt before he was able to finish so another developer purchased the 3rd piece of land and developed it with more real estate. We now have 3 Country Club Vistas and no common areas.
AugustinD


Posts:2411


01/05/2020 7:57 PM  
DebW3, do you and other "members" pay any money to the corporation? If so, what is the money used for?
DebW3
(Arizona)

Posts:12


01/06/2020 3:00 AM  
AugustinD, we pay an annual assessment fee. Originally it was used to pay expenses for office supplies and insurance and simple stuff but with our current board it has been used for attorneys (theirs, that they use against us at OUR expense).
MelissaP1
(Alabama)

Posts:8922


01/06/2020 4:06 AM  
That is how that works DebW. Are people threatening lawsuits after all correct?

Former HOA President
MelissaP1
(Alabama)

Posts:8922


01/06/2020 4:57 AM  
Let me say a bit more... If you are all asking for various items that need a legal opinion to get back with you on, then YES your HOA is going to run up a high legal bill. A HOA is ONLY funded by it's members for it's members. Where exactly did you think the money was coming from when the HOA has to consult a lawyer to draft a proper response?

Former HOA President
AugustinD


Posts:2411


01/06/2020 5:44 AM  
Posted By DebW3 on 01/06/2020 3:00 AM
AugustinD, we pay an annual assessment fee. Originally it was used to pay expenses for office supplies and insurance and simple stuff but with our current board it has been used for attorneys (theirs, that they use against us at OUR expense).


DebW3, can you please find out what all was being insured? And office supplies for whom? What maintenance, if any, needed to be overseen? About how much was the assessment per year that you paid? Is your community stand-alone houses, connected townhouses, or a condominium? If you can email me a copy of your HOA's Declaration and Articles of Incorporation, this might save a lot of time. My email address is [email protected] . Thank you.
AugustinD


Posts:2411


01/06/2020 7:00 AM  
DebW3, does Article V of your copy of the Articles of Incorporation start with the following paragraph?

"The object and purpose for which the Association is
organized is to provide for the management,
maintenance, and care of the common elements of [redacted]
Townhouses and to perform such other
duties as are imposed upon the Association under the
Declaration and Bylaws, including the enforcement
thereof."
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