Dear Editor,
Valle Vista Property Owners Association was created in 1972 as a non-stock corporation. It created members of the corporation by selling lots and had no shareholders. The Board of Directors wrote CC&Rs (covenants, conditions, & restrictions) to govern the property owners and Bylaws to govern the Board(s). Members were called Co-Council of Members and each lot had one vote. Voting is and always has been the backbone of HOAs and POAs.
In May 1981, that Board applied for and was granted an IRC 501(c)(7) tax exemption through the IRS for the Valle Vista Property Owners Association, with such application checked by the board members of what the new social club would not do. What is important here is that this change was made without the Co-Council of Member’s knowledge or vote. This would have required a 75% approval of all the property owners in 1981. To date, board members continue to violate the application and the Internal Revenue Code. In 1981, the board members continued operating under the original Articles, CC&Rs, and Bylaws although under that tax exemption, the POA essentially dissolved. The reason being that under a 501(c)(7) Social Club, it prohibits administering or enforcing CC&Rs against property owners/members and prohibits any compliance committee. Since that code also prohibits providing fire and police protection, it appears that was when Valle Vista also lost its fire station to Northern Arizona CFD. The original contract, i.e. Articles of Incorporation, was breached with the property owners when the 501c7 was granted. The new Social Club required private membership into the club for its income and membership roll, not billing the property owners. It was also not allowed to be open to the public under the 501(c)(7). The code has not changed but VVPOA continues to violate it by making the golf course open to the public.
There are three recognized units in Valle Vista. Unit 1 created July 19, 1972, Unit 2 created October 1972, and Unit 3 created August 1973. As of August 2023, the Valle Vista corporation ceased to exist. It continues to bill property owners for dues & assessments and charging for use of the pool against the rules under 501(c)(7).
In January 2023, I filed a Petition with the Dept of Real Estate in Phoenix on one issue that the POA was expired. We had a 4-hour hearing in which I went into detail of the issues in Valle Vista and I could tell that the judge was not grasping the gravity of the entire issue. Because of all the fraud & corruption, it is very convoluted. The judge looked at me and said verbatim, “You have BIG problems with this POA.” She made the Order to dismiss my petition which allows me to file a lawsuit in Superior Court. No Order was made by the judge that the POA was granted merit and could continue.
For 43 years, these Boards have gone rogue, have abused and misused the tax exemption, have extorted monies from property owners on threat of liens and collections, have harassed residents with an illegal compliance committee, all while knowing they had no power or authority to do any such things. The residents were unaware that the POA was changed to a Social Club BECAUSE they never got to vote on it, and were not informed of such change.
In 1994 & again in 1999, those Boards filed with the corporation commission “Amendments” to the Articles of Inc. placing Valle Vista into a perpetual state which means never-ending. They did not let the property owners know what they filed or let them vote. A.R.S. 33-261 is the Rule Against Perpetuities. Nothing can be put into a perpetual state with no ending. Those two amendments are fraudulently filed since the Articles of Incorporation clearly state that a 75% approval of the co-council of members is needed to amend the Articles. It was not put to a vote, and again, done without the knowledge of property owners who are the Co-Council of Members. It was done by a resolution of the Board which violated the actual governing documents. According to the Articles, the corporation expired at 50 years for each unit. Additionally, the code used on the amendments is for SHAREHOLDER corporations, which Valle Vista was NOT, so the law was misapplied.
To date, no Board has followed the Articles and Bylaws on dissolving the corporation. The people acting as a Board have not given every property owner their right to vote. They are the same few people who change positions on the Board year after year, and for the past two elections, they gave the position of President to the same person which is against the Bylaws.
To date, they have billed residents for POA dues for over 43 years when their tax exemption does not allow it, threatening owners with liens/collections/foreclosures if they don’t pay, which is extortion. They have charged residents for violations of the CC&Rs and collected fines when the tax exemption does not allow them to have a compliance committee or CC&Rs.
In Arizona, extortion under ARS 13-1804 is a specific type of fraud that involves threats to do harm or take action, requires corrupt intent, and focuses on the obtaining or seeking to obtain property or services through those threats. The legal consequences for victims of extortion schemes under this statute include Class 2 or Class 4 felony charges and restitution payable to the victims.
If you have been a victim of the Valle Vista Property Owners Association, please call (928) 715-2157 and leave your name and number for a call-back on how to join our legal efforts to stop this corruption.
Pamela McKinney
Valle Vista Resident
