Arizona Court Ruling Examines HOA Arbitration Clauses and Homeowner Disputes

October 2026

A recent Arizona Court of Appeals decision has highlighted the importance of fairness and enforceability in homeowners association (HOA) dispute-resolution provisions.

In LoPresto v. Wigwam Creek South Community Association, decided September 25, 2026, the court upheld a lower court ruling that denied an HOA’s request to compel arbitration in a dispute involving an architectural modification. The decision focused on whether the association’s arbitration provisions were enforceable, not on whether homeowners must complete internal dispute resolution before filing a lawsuit.

The case offers a practical reminder for Arizona HOAs and homeowners to understand the dispute-resolution provisions in their community documents.

What Happened in the Case?

The dispute involved homeowners in Wigwam Creek South, a planned community in Arizona. The homeowners requested permission to replace a single gate with a double gate so their disabled son could park his golf cart in the backyard.

The HOA denied the request and upheld that decision after the homeowners challenged it.

The homeowners subsequently filed a lawsuit alleging breach of contract and breach of the covenant of good faith and fair dealing. The claims included allegations that the association had not enforced its governing documents fairly and consistently.

The HOA asked the court to require arbitration based on provisions in its declaration and community guidelines. The lower court declined, and the HOA appealed.

Why the Court Refused to Require Arbitration

The Court of Appeals concluded that the arbitration provisions were substantively unconscionable and therefore unenforceable.

One provision required homeowners to submit disputes with the HOA to binding arbitration but did not impose a comparable requirement on the HOA when it had a dispute with an owner. The court found that this one-sided arrangement was unenforceable.

The court also considered a separate arbitration provision in the community guidelines. Even assuming the provision had been validly adopted, it was similarly unilateral and could not be enforced for the same reason.

The appellate court affirmed the lower court’s decision denying the HOA’s request to compel arbitration.

What the Decision Means for Arizona HOAs

The ruling underscores the importance of reviewing dispute-resolution language in community governing documents.

HOAs may use mediation or arbitration provisions to manage certain disputes, but those provisions must be legally enforceable. A clause that places substantially different dispute-resolution obligations on homeowners and the association may face legal challenges.

For community associations, useful review steps include:

• Reviewing declarations, bylaws, and community rules for dispute-resolution provisions.
• Checking whether arbitration or mediation requirements apply fairly to both the association and homeowners.
• Confirming that rules and amendments were adopted in accordance with the governing documents and applicable law.
• Consulting qualified legal counsel before relying on a disputed provision to compel arbitration.
• Maintaining consistent and well-documented procedures for architectural requests and other homeowner concerns.

The decision does not mean that all HOA arbitration clauses in Arizona are invalid. Enforceability depends on the wording of the provision, the governing documents, and the facts of the particular dispute.

What Homeowners Should Know

Homeowners involved in disputes with their associations should review their community documents to understand the procedures that may apply.

They should also keep records of written requests, board decisions, appeals, and relevant communications. These records can help clarify what steps were taken and may be useful if a dispute later reaches mediation, arbitration, or court.

The LoPresto decision does not create a general rule requiring homeowners to complete internal dispute resolution before filing a lawsuit. Homeowners should seek legal advice about any applicable contractual or statutory requirements before deciding how to proceed.

A Reminder About the Scope of the Ruling

The September 2026 decision is designated as a memorandum decision and is not precedential under Arizona appellate rules, except in circumstances permitted by those rules.

It is therefore best understood as a case-specific application of existing principles concerning unconscionable arbitration provisions, rather than a new statewide rule governing every HOA dispute.

Practical takeaway: Arizona’s LoPresto decision highlights the need for fair and enforceable HOA arbitration provisions. Associations should review their governing documents and homeowners should understand the dispute-resolution procedures that apply to their own communities. The ruling does not establish a universal requirement to complete internal dispute resolution before filing a lawsuit.