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.

rebuttal of CAI 's, "Issues and Perspectives" – pt 1

 The following is a rebuttal of certain assertions and claims found in the CAI online “brochure”, Issues and Perspectives.

  

1.  What to Ask Before You Buy (from CAI’s Issues and Perspectives brochure)

 a.  Issues often arise because of false expectations, misinformation and misunderstanding. You can help ensure a more positive community experience by learning all you can about a community before you buy or rent a home in that neighborhood.

Comment:  This is so disingenuous!  There are no warning notices and advisories to inform homebuyers for “learning all you can about the community”.  For example, that they are entering into a private government where the Bill of Rights does not apply.  Or, that they are providing their homes as collateral for the HOA’s survival, without compensating protections against abuse.  Essentially, the HOA “constitution” is a repudiation of the principles of the American system of democracy.

The CAI propaganda materials, like this brochure and alleged survey, serves CAI’s agenda in defense of the status quo.  The only changes CAI seeks, as evidenced from its repeated appeals, is for the homeowners to get more involved, ignoring the fact that the declaration is an unconscionable adhesion agreement favoring the corporate entity, the HOA, against its members.   And, homebuyers were buying a home, not a political job.

 

b.  Community associations exist because they offer choices, lifestyles, amenities and efficiencies that people value. Yet, with all of their inherent advantages, community associations face complicated issues, none more common than the challenge of balancing the rights of the individual homeowner with those of the community as a whole.

Comment:  How does CAI explain the fact that its lawyers had opposed the “extension of constitutional protections for homeowners . . .”  in its amicus curiae brief to the NJ appellate court (the Twin Rivers free speech case)?  I guess its “balancing” is a bit slanted in favor of HOA governments.

 

c.  While assessments, rules and regulations are important, don’t overlook other fundamental questions: Is it the right kind of community for you and your family?

Comment:  This is a serious question for all homeowners to consider. Homeowners may like the idea of “carefree living”, of the HOA as an enforcer of rules that are alleged designed to maintain property values, or the lifestyle in those specific HOAs that can be considered a resort or retirement community, but not those that are essentially a community of one’s home, of residences.  But, in absence of any information or communications from the authorities — from consumer protection agencies, from the real estate agent, — from the developer, or from the media as a watch dog on reality, how can a buyer make an informed and intelligent decision?  He is not informed of any downside to HOA living, and therefore, he carries a mistaken expectation that he remains under the protection of the democratic jurisdiction of the local government and state.  Not true, as Evan McKenzie mentioned long ago in 1994: the HOA member argues about his rights that he does not have in an HOA. (See Privatopia).

Buyers can buy into an HOA with the above realizations and knowledge, but his choice to proceed is a choice to reject the principles of democratic government in exchange for loose statements about maintaining property values.  There are no defenses that  the buyer does not reject the Constitution.  Is that the “right kind of decision for you and your family”?

 

http://www.caionline.org/about/press/Media%20Statements/statement_buyers.doc

When do unlawful intentional HOA acts become extortion?

Many complaints against HOAs and their management firms have dealt with what can easily be described as intentional disregard of the governing documents or state laws.  Intentional disregard, under a duty of care that results in damage to another, can also be viewed as gross negligence. I am speaking about, for example, 1) failing to respond to legitimate inquires regarding HOA records, especially when there is a dispute over the amounts of money supposedly due the HOA, 2) failing to provide the facts underlying the alleged act constituting a fine, or 3) violations of meeting laws and elections procedures. 
 
Whenever the “black letter” wording of the laws governing documents are violated with respect to any action, impending action, or threat of impending action, including taking the homeowner to court,  the actions can be viewed as extortion when the actions attempt to obtain any property, either money or real property.  This “black letter” condition is important since the HOA will attempt to defend itself by claiming that it had the right to so act under either state laws or the governing documents.  In other instances, the homeowner would have to show that the HOA had abused its discretionary authority, which is a more difficult task.
 
It is inexcusable for an HOA board or management firm not to know the laws, or check them when in doubt, before taking any such action that demands money — assessments, fines and other fees and costs, including attorney fees from a homeowner.  Or to permit directors or the management firm to subject a homeowner to emotional stress, contempt, ridicule, or defamation.
 
It is inexcusable for HOA attorneys to not obtain supporting evidence of the HOA claims as required under ethical rules and the Rules of Civil Procedure of their state — R11(a) in Arizona — that permits a lawyer to take court action only when “to the best of the [attorney’s] knowledge, information and belief formed after reasonable inquiry [the claim] is well founded in fact and is warranted by existing law . . . .”
 
Black’s Law Dictionary defines, in general, extortion as,”The act or practice of obtaining something or compelling some action by illegal means, as by force or coercion.”   The courts require that a plaintiff meet, prove, the requirements set forth in the applicable statute for a violation of the statute. For example, your state has a definition similar to that of Arizona, which requires a homeowner to prove “any” of the 8 listed actions.
 
ARS 13-1804. Theft by extortion; classification (excerpts; emphasis added)

A. A person commits theft by extortion by knowingly obtaining or seeking to obtain property or services by means of a threat to do in the future any of the following:

3. Cause damage to property.
4. Engage in other conduct constituting an offense.
5. Accuse anyone of a crime or bring criminal charges against anyone.
6. Expose a secret or an asserted fact, whether true or false, tending to subject anyone to hatred, contempt or ridicule or to impair the person’s credit or business.
8. Cause anyone to part with any property.
 

Rejecting unjust HOA legal precedent

I have argued that most of the court decisions relating to HOA issues have been “bad law”, because the laws being upheld are, indeed, pro-HOA laws, and that the current public policy influencing the judges[i] also reflects this “HOAs are the next best thing to Mom’s apple pie.”  The recent overruling of a precedent in Citizens United by the US Supreme Court explicitly acknowledges that  “[S]tare decisis is a principle of policy and not a mechanical formula of adherence to the latest decision.[ii]“

 

 My purpose here is to understand the ease with which precedent can be rejected, and the rationale provided for overruling precedent. The specifics of the issue at hand are not relevant to this understanding.  The rationale for overruling precedent is given in Citizens United as,

Our precedent is to be respected unless the most convincing of reasons demonstrates that adherence to it puts us on a course that is sure error. “Beyond workability, the relevant factors in deciding whether to adhere to the principle of stare decisis include the antiquity of the precedent, the reliance interests at stake, and of course whether the decision was well reasoned. We have also examined whether “experience has pointed up the precedent’s shortcomings.”

Austin [the precedent in question] is undermined by experience since its announcement.

Some examples of not “well reasoned”, or “bad law”, can be found in Inwood v. Harris[iii] in which the Texas Supreme Court held that equitable servitude laws pertaining to the timing of the filing of CC&Rs superseded the Texas Constitution. The constitution contained explicit protection of homesteads under its homestead exemption provisions.  The NJ Supreme Court, in the Twin Rivers[iv] free speech case, also upheld equitable servitude laws and private contracts as superior to First Amendment rights.[v]  Additionally, at the superior court level, there’s the decision on the unconstitutionality of an Arizona statute that provided for independent tribunal adjudications of HOA disputes.[vi] The judge ignored the deficiencies of the HOA’s “due process” procedures under the HOA’s “after an opportunity to be heard” covenant.

And finally, in general, there is the failure to apply the “antiquity of the precedent” justification to the 1946 Marsh v. Alabama holding of a company town, “public functions” test for state actors.[vii]  The precedent value of this decision is still retained when, after 64 years,  “experience has pointed up the precedent’s shortcomings.”

[i] See in general, HOAs, justice, and judicial myth and precedent.

[ii] CITIZENS UNITED v. FEDERAL ELECTION COMM’N , 08-205, Jan. 21, 2010 at 47. (“Stare decisis” is the legal doctrine of precedent under which the court must follow earlier judicial decisions, otherwise the whole legitimacy of “rule by law” and not by man — and the moral authority of the courts —  would be undermined. The earlier decided case serves as the “precedent” for later decisions on similar issues.)

[iii] Inwood v. Harris, 736 S.W.2d 632 (Tex. 1987) (homestead; covenants running with the land).

[iv] Comm. for a Better Twin Rivers v. Twin Rivers Homeowners’ Ass’n, 929 A.2d 1060 (N.J. 2007).

[v] See critique of this opinion: The Twin Rivers Case: Of Homeowners Associations, Free Speech Rights and Privatized Mini-Governments, Paula A. Franzese and Steven Siegel, 5 RUTGERS J.L. & PUB. POL’Y 630 (2008).  Part of the issue on Homeowner Associations: Problems and Solutions.

[vi] See  The State of Arizona will not protect buyers of HOA homes! on HOA Private Government website for a detailed account of this disgraceful default decision.

[vii] Marsh V. Alabama, 326 US 501 (1946) (company town and public functions) .

Public speaking conflict: CAI attorney vs. HOA clients

It is well known that the national lobbying trade group, CAI, has its own agenda.  What we have never determined is whether or not that agenda is consistent with the views of the clients, the HOAs that the CAI attorneys represent.  It is also not uncommon for HOA board members to appear before the legislature or to speak out on proposed legislation.  What we have never determined is whether or not that the position of the board member is consistent with the views of the membership. I have never once heard a board member announce, with respect to his public position on legislation that he acts pursuant to a vote of the majority of the membership.  After all, isn’t the HOA supposed to be a democracy?

The point that I’ve raised in the past is that the board does not speak for the membership on public issues in absence of such a vote, and any such statements are an abuse of authority.  There is no grant of such public representation in any Declaration of CC&Rs, or in any statute or HOA Act in any state.  The astute CAI attorneys well know that!  Yet, they act as if the board represents the position of the membership on public issues, without first determining, after reasonable inquiry, if a vote of the membership so agreed with the board’s position.  Yes, the attorney can say that its client, the HOA as represented by the board, has taken such a position, but it cannot act in any way as if this is the position of the membership.  However, it has been my experience that these attorneys leave the impression that their views are the views of all HOAs and their members, whether currently represented, formerly represented, or never represented.

I am not saying that CAI attorneys cannot speak out, but they must be very careful of attributing or implying that the CAI agenda is also that of the HOA.  The safest  and most ethical route is to simply say, “I speak for the national trade group, CAI”.

In Oasis West Realty v. Goldman, pertaining to the right of an attorney to speak out on public issues — think advocating legislation — the CAL. appellate court held,

“These authorities stand for the proposition that a lawyer may take positions adverse to a client, as long as current representation is not compromised, something which does not concern us, and as long as confidentiality is not compromised. . . . We cannot find that by representing a client, a lawyer forever after forfeits the constitutional right to speak on matters of public interest.”

In the court’s discussion, we find legal authorities (excerpts are itemized below) with respect to attorney – client conflicts of interest, with a focus on speaking out on public issues (emphasis added):

1. Attorneys have a duty to maintain undivided loyalty to their clients to avoid undermining public confidence in the legal profession and the judicial process.

2. Our Supreme Court has also said that “`It is . . . an attorney’s duty to protect his client in every possible way, and it is a violation of that duty for him to assume a position adverse or antagonistic to his client without the latter’s free and intelligent consent . . . . By virtue of this rule an attorney is precluded from assuming any relation which would prevent him from devoting his entire energies to his client’s interests.’

 3. “Loyalty to a client requires subordination of a lawyer’s personal interests when acting in a professional capacity. But loyalty to a client does not require extinguishment of a lawyer’s deepest convictions; and there are occasions where exercise of these convictions — even an exercise debatable in professional terms — is protected by the Constitution.”

4. [T]he Restatement (Third) of the Law Governing Lawyers, section 125. Section 125 provides that “Unless the affected client consents to the representation . . . a lawyer may not represent a client if there is a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s financial or other personal interests.”   Comment b explains the rationale: “Personal interests of a lawyer that are inconsistent with those of a client might significantly limit the lawyer’s ability to pursue the client’s interest.” . . . Consent of the lawyer’s clients is not required.

5. “However, a lawyer’s right to freedom of expression is modified by the lawyer’s duties to clients. Thus, a lawyer may not publicly take a policy position that is adverse to the position of a client that the lawyer is currently representing if doing so would materially and adversely affect the lawyer’s representation of the client in the matter. The requirement that a lawyer not misuse a client’s confidential information . . . similarly applies to discussion of public issues.”

Read Oasis West v. Goldman, B217141, Cal.App.2 Dist., Mar. 3, 2010 at http://www.leagle.com/unsecure/page.htm?shortname=incaco20100303039

FL bills conscript condo renters and hold them liable for HOA assessments

I am quite disturbed by this Florida legislation that attempts to save the condominium industry at the expense of unit renters, who are detested by all “loyal” condo and HOA believers.  As a non-signee to the Declaration, renters are looked upon as second-class citizens of the Condo society, treated as personae non gratae, and feared that they may destroy precious property values.

In spite of this view or renters, or maybe because of it, these two bills before the Florida Legislature, HB 329 and S 2458, now turn to these second-class condo “citizens” to impose financial obligations on renters — as substitutes for delinquent unit owners — by statutory fiat.  While any imposed obligation on the renter similar to a garnishment of the unit owner is rational and ethically acceptable, up to the amount of the rental payments, the bill gets extreme when it declares that “the unit’s tenant is jointly and severally  liable with the unit and unit owner for the unit and unit  owner’s monetary obligations to the association.”

This forced service to the private condo governments that operate outside the Constitution is quite draconian (emphasis added):

The tenant’s monetary obligations to the association include, but are not limited to, all assessments and installments, late charges, collection costs, attorney’s fees  and court costs, and other monetary obligations from the unit  owner to the association, and any interest thereon, that come  due against the unit or the unit owner from the date of the  association’s notice to the tenant, and accruing to the date all  the monetary obligations are paid in full, regardless of whether the lease is terminated or otherwise concluded. In addition to  all other remedies, the association may enforce the tenant’s liability by evicting the tenant, either in the association’s name or in the name of the unit owner . . . .”

 

While the intent of the sponsor has merit, the execution of that intent is highly defective.  In fact, the bill appears to be punitive of the renter, placing the burden for the financial crisis, the unit owners delinquency, and the condo board’s failure to prudently manage the condo onto the innocent renter. Talk about government interference into private lease agreements!  Its actions —  tantamount to state actions — in support of, in cooperation with, and constituting a symbiotic relationship, take the cake.  

There is no “Legislative Intent” section, as found in the Sponsor’s other bill, HB 237, whereby the legislature attempts to define the legitimate government purpose in enacting such statutes.  Perhaps because they can’t justify this outlandish bill to protect a private government unaccountable to the state.  Perhaps because there is no compelling reason for this violations of due process when, today, there are remedies available to the HOA/condo to collect delinquent owner rental income.

Would the Legislature dare impose such obligations on all renters to compensate for property owners not paying their real estate taxes to the local government?   Aren’t these local governments also facing huge shortfalls and are shutting down services, too? What is this obsession to protect authoritarian private governments over civil governments?

Nothing has been proposed to hold the condo strictly accountable to the state or to provide for strict penalties against condo violations of the laws and Declaration. The same abuse that the sponsor is well aware of will now infect the renters in a three-way free-for-all as to who’s at fault, and who is not obeying the laws.  It will be a nightmare.  There is even no provision to inform and warn those seeking to rent in a condo of these obligations being imposed on them by this bill. 

What is readily apparent is that property values come first and foremost over long cherished values of justice, fairness, and upholding constitutional protections that reign in out-of-control governments.  Paraphrasing Jim Wallis in Rediscovering Values,

Do we want [property] values to prevail everywhere and in all things?  Are there some areas of life where [property] values should not determine what is most important — personal and family relationships, ethics and religion, community and public service and social justice?  Are there certain things degraded when [property values] are allowed to be the ultimate measure?  Are there certain social values and practices that are higher than market values? 

 

Read the full bill at HB 239.