There are lots of interesting issues in your fact pattern. In Arizona, fines are really an empty threat. An HOA can only collect fines if they sue you. There isn't any legal limit on how much they can fine, but the statutes state that a homeowner must be given notice and an opportunity to be heard before an HOA can assess the fines.
Also, there is also a strong chance that homeowners who have a violation and that violation exists for a long time or is committed by other owners without an enforcement action, the HOA may have waived its right to enforce.
It would be best to get some legal advice and have someone respond to the HOA on your behalf.
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