Scottsdale East Homes Inc. housing co-op

Tensions between some residents and the board and management company at the Scottsdale East Homes Inc. housing co-op continue to rise amidst allegations of mismanagement and wasteful spending.

The property manager at the Scottsdale East Homes unsuccessfully accused a resident of harassment in the latest conflict between members and management at the housing co-op.

A number of residents have butted heads for with the community’s board of directors and HOAMCO, its management company, over allegations of wasteful spending and poor workmanship by board-hired contractors as well as sloppy bookkeeping.

Property Manager Rhonda Harding, who works for HOAMCO, took resident Pete Aitken to Scottsdale City Court alleging that he had threatened her in emails related to broader community complaints. She sought an injunction for harassment against him.

On Sept. 26, Judge Denise Scammon ruled in favor Aitken’s favor after determining that Harding did not meet the burden of proof necessary to obtain an injunction against him.

Harding cited emails Aitken sent her requesting more information about erroneous fines showing up on his account and other issues he experienced as a result of HOAMCO’s questionable practices.

At least five residents have complained about HOAMCO assessing late payment fees in error on their accounts. To date, HOAMCO has not responded to requests for comment about the source of the errors or how it is dealing with the issue.

 Harding cited an email in which Aitken wrote, “That was a response, not answers to my questions…The current (Board of Directors) will not always be here to you or HOAMCO. Just a thought. Have a fantastic day.”

Harding forwarded the response to Scottsdale East Homes Board President Linda Shannon and other members of the board with the comment, “Is that a threat?”

A lawyer representing Aitken before the court argued that Harding’s petition was little more than a bullying tactic meant to silence complaints from residents.

The lawyer said that “this is an attempt by this (co-op association) to put prior restraints on free speech with threats and intimidation.”

The judge agreed with the attorney’s contention that the email did not constitute harassment.

“I do not find that you have met your burden of proof,” Scammon said.

The recent harassment case is just the latest in a series of conflicts between a growing group of Scottsdale East members and the board and management company.

Much of the conflict stems from decisions by the board to hire Tempe-based Peterson Plumbing to perform preventative maintenance in the community and emergency plumbing repairs.

Residents were particularly upset that board used over $700,000 from the community’s reserve accounts to pay for repairs in recent years and also took out a loan worth over $4 million.

Minutes from a recent board meeting indicated the community has spent nearly $1.7 million on the plumbing project alone between 2017 and 2019.

Four Scottsdale East residents have also told to the Progress that Peterson has performed subpar and/or unfinished work in their units, forcing some members out of their units for weeks or months at a time.

City of Scottsdale records also indicates Peterson was performing work on the property without obtaining the proper permits from the city.

The company also has two open complaints with the Arizona Registrar of Contractors.

One complaint, filed by resident Betty Story, resulted in a citation after Story suspected Peterson workers installed a water heater improperly in her unit in April.

She contacted the Arizona Registrar of Contractors, resulting in an investigation that cited Peterson, also known as Blue Water Management Group, for work that “failed to meet minimum workmanship standards.”

Among other issues, the AZROC investigator found that when Peterson installed the new water heartier, it cut and capped the old pressure valve drain pipe and left the new drain pipe open above the floor.

The investigator also found that Peterson did not apply for a permit from the city for the water heater work until August – months after it actually performed the work.

A follow-up investigation revealed that Peterson failed to correct the issue within 15 days, per the original AZROC order.

AZROC has since issued a citation to Peterson, giving the company until October 15 to respond to the findings.

The citation includes five charges, including that the company disregarded local building codes, failed to comply with rules set forth by the state and registrar, failing to correct issues cited by the AZROC investigator, and operating under  a name separate from the name on its state license.

The company could potentially lose its plumbing license if it does not correct the naming issue, according to a warning letter from AZROC.

A second complaint filed against Blue Water Management, aka Peterson Plumbing, within September also resulted in a written directive from the registrar, compelling Peterson to correct shoddy work.

That directive included findings the contractor installed a hot water heater and a garbage disposal., according to a letter sent to the company by the registrar on September 25.

Once again, AZROC also found Peterson workers performed work without proper city permits.

“The Scottsdale Building Department confirmed a significant amount of work was done on this project without proper permits,” according to the September 25 letter.

Peterson Plumbing President Ron Peterson did not respond to a request for comment.

Despite the overwhelming evidence that Peterson has flouted state and local rules in the work it performed at Scottsdale Eats Homes, the community’s board and management company continue to side with the contract and take a defensive posture against residents seeking answers.

On August 8, Shannon, the board president, sent a letter to the AZROC investigator alleging that Story had no right to file a complaint because, as a member of the housing co-op, she does not own her unit. Rather, the entire property is owned by the membership.

“Therefore any future complaints from this community should be recognized only if they originate from the Board of Directors,” Shannon wrote.

Shannon also said that all Peterson work had been performed with the proper city permits in place – an oft-parroted line from the board and its attorney at the Carpenter Hazelwood law firm that has been disproven on multiple occasions by both the City of Scottsdale and the AZROC investigation.

In addition to the AZROC investigator’s findings, Senior Assistant City Attorney Eric Anderson sent a letter to the board’s attorney in July asking the board to stop discouraging members from contacting the city and stating “Additionally, when first contacted, city inspection officials determined that construction was occurring without the required permit which is a violation of City Code.”

At the time, O’Brien disputed Anderson’s findings.

The board and its attorney did not respond to a request for comment on this story.