Woman May Face Heavy Sanctions

In Homeowners' Association Lawsuit

A lawsuit against a homeowners' association northwest of Tucson could now come back against the woman who filed it. Whatever the court decides, a Tucson legislator says it's one more example of how the state needs to regulate the associations more closely.

After more than six years in Superior Court, the suit filed against Casas Adobes Terrace by a resident there could be an expensive lesson for Mika Sadai, who faces hundreds of thousands of dollars in court sanctions.

Sadai filed against the Casas Adobes Terrace Homeowners Association in 1998 for, among other things, a recall election to take her off the board of directors that she says was illegal. But since then, Sadai transferred ownership of her house and some other properties to family members. The court says not only does that change the nature of her case, but Sadai was not honest about the transfers. Now the court is considering as much as $400,000 in sanctions against her.

"Courts make many mistakes about facts," Sadai says.  "Courts are not right, necessarily. That's the problem."

State Representative Ted Downing says whatever the court decides in this case, it shows the state should better define its HOA laws.

"It's not a government, it's not a corporation, what is it, it's somewhere in between, and it's an in between without clear definition by the state," he says. "That's our job and I'm hoping we can define it."

"We don't have a clear set of rules where people can come down and deal with one another, and say, 'This is how I appeal.' There's no appeal in Arizona. You only go to the courts and you end up with what you're seeing here."

New regulation could be a testy area with HOA's, but even Rich Baumann on the Casas Adobes Terrace's current board agrees more specifics -- such as how long to give a resident before penalizing them for a violation -- could take out some guesswork.

"If there was a standard length of time and that was published, it could provide for more uniformity," he says.

Sadai says, "Homeowners associations are flawed fundamentally. They need not only surface reform, but to be plowed from the bottom."

Just how deep the state can plow is something the legislature must determine, and that will take time.

The attorney representing the homeowners' association and other defendants did not want to comment on this case. The judge could have a decision within the next 30 days.