Reprinted from http://arizonahoa.blogspot.com/

The blog referenced in the title is a site that all Arizona residents should follow.

Dear (HOA Insurer – see LIST)                                                                                                                       February 13, 2017

I am part of an Arizona homeowners group exposing serious risks to the financial system because of financial malpractice in the HOA industry. But we are also fighting legal terrorism on homeowners by their HOA’s via their attorneys if they dare ask questions, especially about money. See the list in Attachment 1.

You are financing much of this.  In 2007 legislators instigated an Administrative Law process via the Office of Administrative Hearings (“OAH”) designed to prevent disputes over garbage cans escalating, leading to $hundreds of thousands of legal bills in Superior Court, and occasionally foreclosures.

Arizona Superior Court data has confirmed that Court actions since 2007 involving HOA’s and these attorneys numbered 16,744 compared to 150 at the OAH. It also indicates 90% of these stem from HOA’s. So much for Alternative Dispute Resolution. Lawsuits and debt collection, see Attachment 2, are major sources of revenue for these attorneys. The other is defending OAH and other cases paid for by you.

My wife and I are members of 4 HOA’s and big believers in using the administrative process. We have had 5 prior OAH cases, all of which involved transparency issues. The first case we won was constitutionally challenged in Superior Court in 2008 by HOA attorneys. Thanks to the then Senator O’Halleran, the HOA blinked, and withdrew its appeal. Ekmark & Ekmark then “resigned” leaving the HOA to fight for reimbursement from CNA of almost $40,000 of legal fees fighting a simple records request.

Standard practice for these attorneys is to intervene with you on the HOA’s behalf. See a recent case in Attachment 3. They argue this is the start of a lawsuit because an unfavorable Administrative decision compromises a subsequent Superior Court appeal by the Administrative ruling. BUT AN ADMINISTRATIVE HEARING IS NOT AN “ACTION”. The claim is simply enforcement of regulations with the maximum cost being a $500 filing fee. Note this may become abundantly explicit pursuant to two bills, SB-1289 & SB-1072, the latter part of a national constitutional group’s efforts to reinforce the separation of powers. See Attachment 4. The goal being to uncouple completely the OAH process and Superior Court so that any appeal would be close to a nuevo trial. Consequently, the need to defend an Administrative proceeding disappears, if it ever existed anyway. As insurers, you might ask to be notified of such proceedings but, properly worded, you would not be obliged to defend something where you cannot recover attorney’s costs. Please support these bills.

Furthermore, as a banker and risk manager, and with your significant risk to the HOA industry, I would be remiss if I did not alert you to one of the biggest financials swamps I’ve seen working on Wall Street. This affects the 68 million of American homeowners who pay $75billion annually to a totally unregulated group of players – HOA Management Companies acting as shadow banks. See more below.

We’d welcome a dialogue.

Sincerely

John Sellers

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