Justifications for an independent HOA regulatory agency

Shortly I will be submitting to the Arizona Legislature a revised version of my 2015 Model Regulatory Agency Bill that creates an independent Department of Homeowners Associations.  It is an agency of the homeowners, by the homeowners, for the homeowners.

It is not an intrusion into private contracts, but the fulfillment of the State’s obligations under the Arizona Constitution, Article 2, Declaration of Rights, as summarized by Section 2,  “All political power is inherent in the people, and . . . their just powers . . . are established to protect and maintain individual rights.” 

To better assist readers in understanding the intents and purposes of this bill I have put words in the mouth of the Legislature, using the following excerpt from the proposed bill.

Sec. 20. [Proposed] Legislative findings and intent: creation of independent agency to protect the interests of homeowners in HOAs

1. It is the intent of the legislature to find, determine and clarify all of the following after a careful consideration of the long history of the legal structure and scheme of HOAs, raising significant questions of constitutional violations of due process and the equal protection of the law:

2. The legislature determines and finds that over the years owners in condominiums and planned communities are frequently subjected to inconsistent, unreasonable and often unlawful enforcement and application of the declarations, rules and bylaws that govern their communities; that their managers and their boards of directors, and owners are often unable to afford the cost of formally litigating their disputes in the superior court;

3. The legislature further determines and finds that existing statutes fail to protect the homeowner against the defects in the HOA legal structure and scheme that deny the homeowner the privileges, immunities, and rights and freedoms guaranteed to all citizens of Arizona;

4. The legislature further determines and finds that, similar to the purposes and functions of the National Labor Relations Board, a Department of Homeowners Associations is necessary to protect homeowners from reprisals, social ostracization, harassment, slander, and assault by HOA boards and management companies; and to guarantee homeowners the right to form entities and to join together to address HOA related issues; to bargain collectively to improve terms and conditions of the governing documents;

5. The legislature further finds the necessity of creating an independent state agency whose function is to provide important consumer protection for owners in and prospective buyers of condominiums and planned communities; a state agency that will efficiently and effectively provide for resolution of these common interest community disputes without the expense, formality and difficulty of requiring a trial in the superior court in every instance, while still maintaining the ability and right to recourse in the superior court, and without threat to the core functions of the judiciary.