Author: HOAGOV

"The Voice for HOA Constitutionality". I have been a long-term homeowner rights authority, advocate and author of "The HOA-Land Nation Within America" (2019) and" Establishing the New America of independent HOA principalities" (2008). See HOA Constitutional Government at http://pvtgov.org. My efforts with HOAs took me to a broader concern that was deeply affecting the constituionality of HOAs. Those broad societal and plotical concerns caused me to start this new blog for my commentaries on the State of the New America.

Traitors and turncoats: HOA directors as CAI members

In every state HOA directors have a fiduciary duty to the HOA, to act in good faith, and as a prudent person would (as he would spend his own money).  Why then, are HOA directors also CAI members?  CAI is a vendor, a business trade organization formed to support the business interests of its members, mainly attorneys and managers.  To say that the vendors and the consumers share the same goals is to question the speaker’s mental state.

It’s understandable for consumers to seek assistance from vendors, as happens in many different industries, but to join and support a vendor organization?  The usual procedure is for the vendors to become associate or affiliate members of the consumer organization, which in our case would be an HOA organization.  (Those HOA associations of associations, like ECHO in California and SCOHA in Arizona, are just fronts for a CAI controlled entity.)

How and why did this occur?  It began at the very start with the  initial 1974 composition of CAI that had HOAs as a member category, although not quite explicitly stated.  Each of the 5 categories was to be equally represented in governing CAI: 1) builders and developers, 2) homeowner leaders of associations, 3) association managers, 4) public officials, and 5) other vendors.[i]  At that time, CAI was a 501(c)3 educational organization and not a trade group.  But this changed in the period of 1989 – 1993.

At the 1989 CAI retreat, controversy emerged on just who CAI represented given the fact that HOAs were consumers, not vendors. According to the CAI “historian”  Donald R. Stabile, “One participant commented that the CAI . . .  builder and developer group viewed CAI as a consumer organization teaching consumers how to sue the builders” to which another responded, “CAI is a professional organization and not a consumer group; that it was never intended to be a consumer group”. [ii]

Stabile continues discussing this important turnabout period in CAI history when it felt the need to become a business trade group, yet still retain the homeowners as members. In regard to homebuyers and residents, “To be sure, getting them interested in CAs [HOAS] was an important element in enhancing the popularity of this new form of housing” [read, mass marketing of HOAs]; and, “The advice they [the buyers] received from CAI was consistent with what [CAI developers and managers] needed consumers to be hearing”.[iii] 

As to the thoughts of the 1973 Founders of CAI at this juncture, Stabile adds that they “deemed it important for attaining legitimacy for the  CAI as a voice for the entire industry” [iv] and to relate “positive aspects to the public especially regarding public policy issues”.[v]  (They have since dropped that line).  Concern centered that a “more consumer-oriented organization” would supplant CAI, and that “other citizens’ associations, which were consumer motivated, might become the national representative.” [vi]

It seems that the roots of a great con started in that 1993 period that altered the purpose and mission of CAI, when lobbying for their members predominated under the guise of promoting vibrant and harmonious communities.   In 2005, some 13 years later, CAI finally dropped the façade of representing HOAs – HOAs were no longer members. All through this period CAI, and many of its attorney members, had addressed legislatures saying that they represented homeowners and HOAs.  And still today this claim appears quite frequently in CAI public statements.

What we have today is the faithful follower Team Players and the dogmatic True Believers (see The HOA Privatization Scale) simply denying reality like the Emperor in the fairytale, The Emperor’s New Clothes.[vii]  When a little boy cried, “He has no clothes,”  the Emperor realized that he had been duped. Yet, he continued to believe in his delusion since he could not admit having being wronged by con men.

For whom does the HOA director – CAI member serve?  Isn’t this an outright conflict of interest?   Does he serve as a “patriot” for the HOA, under legal requirements and dictates?  Or, for  the CAI business trade group as a “turncoat” to his HOA?   HOA members must reject board memberships in CAI that are paid for by member assessments.  These directors/officers are traitors, turncoats, and fifth columnists, all believing that they are doing good for the HOA.

 

Further reading:

For a detailed, non-CAI history of HOAs and CAI, see The Foundations of Homeowners Associations and the New America.

 

Notes

[i] Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing, Donald R. Stabile, (Greenwood Press 2000)  p. 117.

[ii] Id, p. 129. (CAI became a 501(c)6 business trade group in 1992).

[iii] Id, p. 133.

[iv] Id.

[v] Id, p.131.

[vi] Id., p. 129.

[vii]  The Emperor’s New Clothes, Mindfully.org (http://www.mindfully.org/Reform/Emperors-New-Clothes.htm), June 7, 2012.

Exchange with Ward Luca on HOA legitimacy and legislative reforms

New comment on Ward Lucas & The HOA Hell Blog

See complete exchange at Homeowners Claim HOA President Abuses Power

pvtgov:

What homeowners don’t realize is that they are at the mercy of total strangers who are their neighbors in an HOA. In order to make the HOA concept work, and to make them appealable to the masses, HOA officers and boards were given a free pass. No checks and balances and no state imposed meaningful […]

Ward Lucas:

Nobody in the world crystallizes the problem better than you do, George. With Las Vegas totally collapsing, what plan would you submit to the Governor or Legislature there, and what plan would work with every state? And do you believe, as I do, that the entire national HOA structure is corrupt?

HOA Privatization Scale: facing reality

Note:  As you read this commentary, please keep in mind the serious revelations of wrong-doing in HOA-Land: in Nevada, in California with corrupt judges, in Arizona where the case files on charges against an HOA attorney for aiding and abetting have been sealed, and in those states with consumer “pacifier” ombudsmen who accomplish very little.   Many will blame the government, and ignore the role played by the HOA member in allowing such activities to happen with such ease.  The Privatization Scale shows an attitude that can be described as an irrational fear of, “Don’t make waves otherwise the government will take my HOA away.”

 HOA Privatization Scale

  Having spent a few years in this arena of homeowner associations, I’ve come up with a scale to help define where a person stands on the status and acceptance of HOAs.  This is based on the attitudes and statements made by the person and will be helpful in understanding and communicating with him.

I chose a scale based on the degree of privatization that is acceptable to the HOA member; that is, how strongly does the person identify and accept the level of privatization in one’s life and home and the intrusion into one’s privacy by HOA boards. There are 5 classifications:

 1.      REVOLUTIONARY – This person sees HOAs as an anomaly to the American way of life and beliefs, and operating outside the laws of the land.  The HOA model must be completely revised or removed.

 2.      REFORMER— This person generally accepts the HOA legal model and powers of the HOA as granted by the CC&Rs, and permitted by the state governments. He only wants the board to change its ways to conform to his views.  He’s primarily concerned about his own local problem.

 3.      COMPLACENT — He is the person who is content with his HOA, only seeing “personal” aspects of the HOA’s powers and functions; that is, the HOA keeps the community neat and clean, provides amenities, etc. This person does not understand the broader issues surrounding HOAs.  There are no problems with the board, just those homeowners who don’t comply.  The board does a good job.

 4.      TEAM PLAYER — This person understands the private nature of the HOA, but prefers it and the sanctions against members.  He primarily is concerned about the quality and value of his community.  A believer in private clubs and their restrictions, and a person’s right to associate with whom he pleases. He does not let violations of fundamental principles and laws affect him.

5.      TRUE BELIEVER — This person is a power player who understands that the HOA private organization structure, with the lack of government enforcement against HOA board violators, offers an opportunity to control and to dominate. Enforcement is necessary to protect property values. What’s good for him is good for the community. Most horror stories can be found here.

 The graph shows a normal distribution curve and the percentages of the people within each segment.  As can be seen, I have shifted the Complacent category to the left. It signifies a preference by HOA members in favor of acceptance of the HOA legal concept, beyond an unbiased expectation.  That is, all things being equal, as I’ve tried to accomplish with the scale, category 3 should fall in the center of the graph.

 In the normal course of things, those at the extremes, the Revolutionaries and True Believers, are the most proactive and vocal segments, but not in equal strengths of being active.  The right-side has been more vocal and influential.

 From my many years of direct involvement in the HOA reform movement and my research and study into social and political reform movements, the environment and conditions necessary for substantive reforms to occur are not even on the horizon.  Token reforms will occur here and here, and some have brought substantive changes like the OAH adjudication of HOA disputes in Arizona, and the prohibition on foreclosing just for HOA fines.  Sadly, though, many substantive reform bills have been repeatedly rejected by state legislatures.

 As long as reformer-advocates continue to accept the legitimacy of the HOA legal scheme — not wrongful or unlawful — they have rejected their most powerful weapon in their battle to achieve substantive reforms.  And in doing so, they have allowed their very powerful oppressors to sit as equals at the bargaining table.  The outcome is, and can only be, as expected and as demonstrated historically. 

  

ASSERT YOUR RIGHTS AS A CITIZEN

REJECT THE HOA CONSTITUTION

 Send the HOA Member Declaration of Citizenship to your legislators!

Is your HOA manager engaging in the unauthorized practice of law?

State Bars take a strong stand against persons who are not lawyers or licensed paralegals providing advice, filing forms, or preparing documents that affect your legal rights.  That means, telling you what the law or governing documents say about why they can do what they are doing!  It happens every day, everywhere, in all states.  The regulation of the practice of law can be found in the statutes and Supreme Court rules of every state. They are complex and detailed, but my summary is correct.  (For Arizona see, Supreme Court Rules, VI. UNAUTHORIZED PRACTICE OF LAW, Rule 75 et seq.)

In 2004, the Arizona State Bar Advisory Opinion, UPL 04-02 – Property Management Companies, addressed 2 important issues that occur quite frequently in many HOAs.   They are:

 

1.     May a property management company prepare documents such as late payment notices, demand letters seeking payment of rent or association fees, and eviction notices relating to the property being managed? Yes, if the preparation of such documents is incidental to the regular course of the property management company’s business or if the documents are prepared by a certified document preparer.

 

2.     May a property management company prepare and record liens relating to the property being managed? Yes, if the preparation and recording of such liens is incidental to the regular course of the property management company’s business or if the liens are prepared and recorded by a certified document preparer.

 

The opinion clarifies  (1) above that,

However, preparation of documents such as eviction notices or late payment notices constitutes the practice of law . . . if they are intended to affect a property owner’s legal rights relative to a property owner’s tenant.

And therefore, the manager is engaging in the unauthorized practice of law (UPL) when a state law or governing document requires such an act.  Otherwise, the notice has no legal effect, according to the Opinion.

Also, these notices are not incidental to the HOA property manager’s  duties.

 

In regard to (2) above, filing of liens, the Opinion states,

[A] property management company’s preparation and recording of a lien constitutes the practice of law, because a lien is intended to affect either the property owner’s rights relative to a tenant or a homeowners’ associations’ rights relative to an individual homeowner. Additionally, because a lien is filed with the County Recorder, the preparation and recording of a lien is also the practice of law . . . .

Again, if not incidental and performed by a certified paralegal.

With respect to a 3rd question on representing the HOA before tribunals, the Opinion said no way.  Of course, it may supply information to the HOA.

 

The delegation, and many times absolute delegation, to HOA managers/compnies by the HOA board does not permit the manager to act as an attorney and  to violate the law.

If you are subject to any of the above UPL violations, file a complaint with your State Bar, giving the details and evidence, and stating the management company name, if any, and any CAI or other managers association membership.  Let’s get the facts out.  Only you can clean up this mess with HOAs!

 

Allegations filed against AZ HOA attorneys in sealed case

Of the 66 General Allegations in the court appointed Receiver suit against the HOA’s former attorney, CAI  and CCAL members  Maxwell and  Morgan, I have prepared a list of  13 allegations that I consider representative of the allegations.   On behalf of the  public and its constitutional right to know, they are listed because the court completely sealed the records in DC Lot Owners v. Maxwell & Morgan, CV 2010-004684, Pinal County Superior Court, AZ, so that an online  public inquiry results in a “not found.” 

I have not been notified by the court of any such order to close the records, nor was I permitted to see a copy of the order to seal the records.  Such failure to provide a notice and reason for closing court records violates the Arizona Supreme Court Rule 123(d): “Upon closing any record the court shall state the reason for the action, including a reference to the statute, case, rule or administrative order relied upon.”

Understand that an allegation is a claim of wrongdoing by a  party to be proven in court.  I am sure many readers will identify with similar activities by other attorneys that have occurred in their HOA.

To understand these allegations, some clarifications are in order:

  •          “Majority Owners” is a group of owners who took control of the HOA.
  •          “Braslawsce” refers to the underlying law suit that resulted in the appointment of the Receiver, who is bringing this suit against the HOA attorneys.

 

Read the selected allegations here.

 

See,  Arizona court protection of CAI member attorneys