Florida’s HB 1259 [1] has the makings to become landmark legislation: holding the HOA and its directors accountable under criminal penalties as are all municipal employees held accountable. As FL law now stands, they violate the equal protection of the law and due process requirements under the 14th Amendment. Homeowner members are subject to special laws that apply to HOAs and condos and will not pass judicial scrutiny.
Professor McKenzie called it like it is back in 1994 in his seminal book, Privatopia: Homeowner Associations and the Rise of Residential Private Government.
“HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.”
Why the special treatment for HOAs? The answer is obvious. HOAs are contractual governing bodies under state nonprofit corporation law, and thus require a board of directors to run the association. Holding the BOD accountable under criminal law would put a huge crimp in getting members to become directors and officers, a result feared by the pro-HOA parties and even the members themselves. Without directors there cannot be a functioning HOA. Consequently, some modifications to the state’s constitutional system of government had to be made to exempt the BOD from state accountability. Justice was denied the members for the survival of the defective HOA scheme.
Even if directors and officers were offered a salary on par with city/town council members, I doubt this would fly. The members, who go bonkers on any raise in assessments, would not go for it. If they did go for it then they would demand performance from the BOD and the weak argument that they are volunteers with a good heart without the abilities to perform as required and should not be held accountable falls apart.
HB 1259 will surface these major defects in the HOA legal scheme and as well as the unconscionable legislative protection of HOAs. But this will not happen without FL advocates making these constitutional arguments and positions loud and clear – to the legislators, to the media, and to the public at large.
Note 1. See Deborah Goonan’s discussion of HB 1259 at IAC.
HOA Constitutional Government 