Goldwater Institute opposes Arizona SB 1162: homeowners freely consented to HOA governance

Summary

In the Goldwater Institute Daily email release of May 22, 2008, author Nick Dranias specifically opposes Arizona HOA reform bill SB1162 on the basis of contractual interference, stating, “If freedom of contract means anything in this state, it means that we shouldn’t all suffer together when the state overreaches in deciding what’s best for us”. Yet the bill seeks to apply existing contract law to HOAs. In response to a request for assistance from the Institute for Justice in 2002,

You are of course correct that members of homeowner associations have fewer rights than others-but only because they exercised essential rights in the first place, namely freedom of contract and voluntary association. To the extent that individuals entered into such contracts without full disclosure or appreciation of the consequences, that is a matter of contract law, not constitutional law.

And in Cain v. Horne (Arizona school vouchers),

To be sure, even the system of free markets recognizes some limitations upon the principle of consent in ordinary contracts between private individuals. Duress, force, misrepresentation, undue influence, and incompetence may be used to set aside contracts that otherwise meet the normal requirements of offer, acceptance, consideration, and consent.

My argument, to make my position clear, is not against “freedom to contract”, but the “freedom from contract”, as imposed by statutes that ignore the bona fide consent to be governed by the homeowners. It is against the special laws and the granting of special immunities and privileges that the state has either explicitly granted to homeowners associations, or has refused to protect the public from unforeseen and unwanted consequences, such as the loss of rights and privileges enjoyed by those not living in HOAs.

SB1162 must be made into law in order to level the litigation playing field, and to protect private property rights in support of “equal justice under the law”, including homeowners living in HOAs.

Read the complete commentary . . .