Arizona HOA cannot avoid the neighborhood holdout

By Deborah Goonan, Independent American Communities


UPDATED: Aug. 7, 2018 10:30 PM


Crazy, crazy, crazy!

Here’s an HOA dispute over the sale of common property to accommodate a freeway in the Ahwatukee Foothill region of Arizona. According to the report, state and local government officials knew about future plans for the highway nearly 3 decades ago.

Then sometime between 2002 and 2009, the Foothills Reserve community was developed. Ultimately 21 homes were directly in the path of the long-planned South Mountain Freeway.


So Arizona Department of Transportation (ADOT) negotiated deals with homeowners to acquire those properties.

Then ADOT proceeded to negotiate a deal with the HOA, to acquire an additional 13 acres along the southern border of the planned community.



Ahwatukee Foothills Reserve HOA
Google maps image of Ahwatukee Foothills Reserve HOA (captured Aug. 5, 2018)

The HOA hired an attorney with expertise in eminent domain, Dale Zeitlin. Zeiltlin spent several years putting together a deal for the Foothills Reserve HOA to walk away with $6.5 million, which the association plans to use to build new perimeter walls to block the views and noise from the soon-to-be-constructed freeway loop.

But one lone homeowner, Dietmar Hanke, stands in the way of the $6.5 million deal. Hanke continues to appeal ADOT’s right to take the HOA’s common property, even though Zeitlin and HOA board members insist that Hanke’s continued lawsuits have no merit.

After all, the HOA corporation owns the land in question. Individual property owners have no legal claim to common land deeded to the homeowners’ association.

Zeitlin says the HOA board is concerned that, if the matter is not settled promptly, they will miss their window of opportunity to build new barrier walls near the new freeway. It that happens, homeowners near the loop will instead be staring at an unattractive barbed wire fence.

Zeitlin has put Hanke on notice — either agree to the $6.5 million settlement and drop all legal claims with regard to HOA common property, or prepare to pay the HOA’s legal fees.

But Hanke says he won’t be intimidated by the HOA. For him, it’s apparently a matter of principle.

The AFN news release below contains additional details. Chances are good that, with this publicity, Hanke’s neighbors will now begin to pressure him to cave in and accept the deal they’ve been offered by ADOT.

But even after the HOA deal is sealed, there will be more court battles to come.

Lawsuits filed by individual homeowners, seeking financial reimbursement for loss in property value due to the taking of land near their homes for public use, will drag on for several more years.

But it makes anyone with common sense wonder why the County ever allowed a developer to build homes in the path of the future South Mountain Freeway.


Homeowner stands between HOA and $6.5 million ADOT payout

By Paul Maryniak, AFN Executive Editor Aug 1, 2018 Updated Aug 1, 2018

The Arizona Department of Transportation has agreed to pay the Foothills Reserve homeowners association $6.5 million – more than three times it initially offered – for 13 acres of land it desperately needs to continue construction of the South Mountain Freeway.

Only the HOA can’t get its hands on that money – or start proceedings in which 591 homeowners could collect individual damages totaling anywhere from $15 million to $19 million – because one man stands in the way.

Now, the HOA has ratcheted up what has become a nasty legal fight by telling homeowner Dietmar Hanke that if he continues his court battle against ADOT, he’ll be assessed its lawyer’s fees at the rate of $520 an hour plus additional costs that could total thousands of dollars more.

“The association has been incredibly patient with your arguments, but at this point your arguments against possession are financially detrimental to the association,” HOA attorney Dale Zeitlin wrote to Hanke in a July 19 letter, warning that the Foothills Reserve Masters Association “is entitled to recover attorneys’ fees, court costs, costs of investigation and other related expenses incurred in connection with, including but not limited to, the Association’s administrative costs and fees.”

Further warning Hanke that the HOA would slap a lien against his home to recover those costs, Zeitlin said, “This letter puts you on notice that if you do not immediately withdraw your appeals, withdraw your cross-claim against the state, and waive all claims with prejudice, except your claim for severance damages to your home, the association has authorized me to seek all remedies against you.”

Hanke is not backing down.

Read more:


Note: a previous version of this article stated, in error, that ADOT took homes by eminent domain.

The following statement has been provided by Dustin Krugel, ADOT Public Information:

There’s an inaccuracy in blog posted yesterday that stated the Arizona Department of Transportation acquired 21 homes in the Foothills Reserve community in the Ahwatukee area in Phoenix via eminent domain.

NONE of the 21 properties were acquired via condemnation.

Just to be clear, ADOT’s preference is always to come to agreeable terms with property owners impacted by construction and condemnation/eminent domain is always a last resort.

ADOT works with property owners to ensure a smooth
transition to their new locations and provide benefits to the extent allowed by the law, which includes offering fair market value for acquired properties and relocation financial assistance, if needed.

– The acquisition process is a negotiation like any
other home purchase. If a homeowner refuses ADOT’s offers, the acquisition moves into a more formal court process.

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