A faithful reader, appraiser Steve Cole, suggested that in my next Update on the subject of homeowners’ associations, I should discuss the ins and outs of architectural review, also known as design review. If you have ever lived in a neighborhood governed by, or otherwise had to deal with, a homeowners’ association, you have probably heard about the architectural review committee. The architectural review committee is the arm of the homeowners’ association that is charged with making decisions implementing the association’s aesthetic guidelines. In other words, they get to decide whether or not your house addition, patio wall, or new landscaping will be approved under the association’s rules.
The law governing homeowners’ associations in Arizona is in the planned community statutes. There is a section of the planned community statutes that specifically addresses design review or architectural review committees. One of the most important parts of that section says this:
Membership on a design review committee, an architectural committee or a committee that performs similar functions, however denominated, for the planned community shall include at least one member of the board of directors who shall serve as chairperson of the committee.
I think the idea behind that rule is to make the architectural review committee at least somewhat answerable to the membership of the association by making the chairperson of the committee someone who is elected to the board by the members of the association. In the past it was not unusual for the architectural review committee to be made up entirely of association members appointed by the board, and for the membership of the committee to stay the same for long periods of time, resulting in an entrenched minority making decisions without the support or input of the wider membership.
Nathan Hannah, Attorney
Another part of the section governing architectural review committees deals with review and approval of plans for a new house, or a rebuild of a house, where the design is subject to association guidelines. If the association documents permit the association to charge the member a security deposit for review of house plans, the law restricts how the association can handle the deposit. The law also says that the association or the architectural review committee must hold a final design approval meeting for the purpose of issuing approval of the plans for the house, and the member or member’s agent must have the opportunity to attend the meeting. If the plans are approved, the association is required to provide written acknowledgement that the approved plans, including any approved amendments, are in compliance with all rules and guidelines in effect at the time of the approval.
There is also law governing what the association must do to review compliance with the approved plans during construction of the house. If the association claims that the construction doesn’t conform to the plans, the association must provide to the owner a written report specifying any deficiencies, violations or unapproved variations from the approved plans. Then there is more law about how the association must handle the security deposit if the construction is disapproved.
Part of the law actually protects the association from claims that their approval of house plans or construction amounts to a guarantee of compliance with the building code:
Neither the approval of the plans nor the approval of the actual construction by the association or the design review committee shall constitute a representation or warranty that the plans or construction comply with applicable governmental requirements or applicable engineering, design or safety standards. The association in its discretion may release all or any part of the deposit to the member before receiving a compliance report. Release of the deposit to the member does not constitute a representation or warranty from the association that the construction complies with the approved plans.
That part of the law seems pretty straightforward.
They saved what I think is the most important section of the law for last:
Approval of a construction project’s architectural designs, plans and amendments shall not unreasonably be withheld.
That’s not particularly instructive, but it does provide some measure of accountability for the committee’s decisions. That sentence should at least make the committee aware that if their decisions are arbitrary, they could end up getting overruled by a judge or jury. Proving that the committee’s approval was “unreasonably withheld” isn’t ever going to be easy, but it gives property owners some ability to seek an impartial review of the committee’s decision.
Homeowners’ associations don’t operate in a vacuum. They have to follow their own rules, and the law governing all associations. If they do arbitrarily deny an application for approval, the homeowner has at least some recourse.
Nathan B. Hannah is a Shareholder in the Tucson office, and practices in the areas of estate planning and administration, real estate, and commercial transactions. He is also a noted blogger, and you can find more of his articles on his private blog,
Contact Attorney Hannah: nhannah@dmyl.com or 520/ 322-5000
This communication is designed to bring legal developments of interest to the attention of our clients and others. It should not be relied upon as a substitute for specific legal advice in a particular matter. For further information on any of the subjects discussed, or for legal advice in connection with any particular matter, please contact us.
