Category: Opinion

Posts by GKS

Is Florida’s SB 596 a good bill? YES! Part 1

This post is in response to several comments to Florida SB 596 creates a bona fide state HOA agency as necessary state oversight.   I read the 124 page bill and some general comments are in order. 

First, the bill contains just technical corrections, word changes, and division name changes in the last part, after page 40 or so.  The first part deals with the enforcement powers given to the division on condos and HOAs, and the next part deal with some regulatory changes – how HOAs are to operate. This is not a complete rewrite of Chapter 720 as occurred with California’s Davis-Stirling Act that regulates HOAs.

Second, as to changes in the law, opposing the bill because it does not contain a revision that you feel is necessary is not rational.  If the bill proposes changes that you do not like, try to get the sponsor to see it your way.  Others may not see it your way.  But this condition can be handled in subsequent bills.  However, if you feel that the bill’s “bad” seriously outweighs any “good,” then it is understandable that you may be opposed to the bill.

Third, as to some of the general objections made that the bill is too big and is not properly written legislation, I object.  I’ve read many bills from several states, and like law suit filings, the format and organization of the bills varies according to the existing structure and organization of a state’s statutes or code. 

The substantive changes in SB 596 deal with the new enforcement statutes, and some improved changes to the existing statutes.  They are not overwhelming compared to many pro-HOA bills that have been adopted by states.  I do agree that some changes really need to be fixed if they are to be consistent with the intent to protect homeowners, but not so serious as to oppose the bill. 

Fourth, it should be remembered, as Alexander Hamilton once said, “If there is no penalty [for] disobedience, the resolutions or commands which pretend to be laws will, in fact, amount to nothing more than advice or recommendation“ (Federalist Papers #15).  And that’s the overriding intent of this bill — accountability through enforcement. No more free rides for HOA boards. 

Homeowners should be concerned about a watering down of the enforcement provisions, as has occurred in other states, than with nit-picking other issues.  The enforcement is by the state, as it should be, and not out of the homeowner’s pocket.  Florida cannot say that not punishing violators of the law is good public policy.

And, in contrast to the “sky is falling” clamor, accountability will not do in HOAs.  This country has survived for some 230 years subject to the constraints and restrictions of the US Constitution. So can HOAs, but perhaps those who live off the unjust current state of affairs cannot?

Part 2 will contain some details of this bill.

Florida SB 596 creates a bona fide state HOA agency as necessary state oversight

As an alternate to making HOA governments a state entity, the creation and establishment of a bona fide, legitimate state agency established by an effective and meaningful enabling act will accomplish HOA reforms.  Couple the clear and precise intent to provide for checks and balances – meaning state oversight – with a dedicated head of the agency to carry out the agency’s mission, the independent HOA principalities will now be accountable to the state as they should be. 

Florida’s SB 596, sponsored by Senator Hays, proposes such a state agency over HOAs.  It proposes the following addition, among other things, to FS 720.302(2):

Having provided certain powers and authority to homeowners’ associations and in deed restrictions created by developers of mandated properties in residential communities, the Legislature recognizes that it is necessary to provide regulatory oversight of such associations in order to ensure compliance with federal and state laws and local ordinances. It is the intent of the Legislature to protect the rights of parcel owners by ensuring that the powers and authority granted to homeowners’ associations and in deed restrictions created by developers of mandated properties in residential communities conform to a system of checks and balances in order to prevent abuses by these governing authorities. (emphasis added).

From first glance, this bill creates a typical regulatory agency to make laws, set rules, investigate, handle complaints and enforce the law in courts. Among the provisions in this lengthy 124 page bill are penalties, fines, HOA cease and desist orders, and restitution enforceable in the courts by the agency, FBPR, and not having to be brought by the individual homeowner.  The proposed agency is not a “let’s study the problem” typical political tactic to do nothing by creating just an investigatory agency, which insults homeowners with its “we don’t believe you” attitude.    SB 596 is a very good step short of making HOAs state agencies.

It should be obvious to all that what will be argued as government involvement has been brought about precisely because of the abuse within the industry.  It is the failure of those “stakeholder,” specil interest moneyed vendors to police the industry.  It is the failure of the homeowners themselves to police their boards. And consequently, it falls to state governments to promote the general welfare and protect its citizens against abuse by a stronger faction within the community.

Furthermore, making this bill law will help keep the legislature from hearing HOA reform bills year after year.

In order to establish justice and fair play for all homeowners, it remains to insure that the laws are themselves fair and just. The pro-HOA laws must be amended or revoked.  The misguided doctrine that permits CC&Rs and servitude law to supersede constitutional law and contract law must stop. 

Arizona’s HB 2371 empowers unlicensed HOA property managers to avoid UPL

In short, HB 2371 would allow untrained and unlicensed HOA property managers to represent HOAs in small claims court, but does not allow the homeowner to be represented.  Yet, real estate agents, who are required to take continuing education courses in agency, real estate, and contracts law, are not allowed to represent others in court.  And even licensed paralegals cannot represent others! Why allow untrained and unlicensed HOA managers to represent a special class of nonprofit entities?  What legitimate reason is there for this provision except to provide income for the special interests?

The only justification for this bill, which was by offered by the Sponsor, was that it was not controversial and it was agreed to at a meeting of all the stakeholders. However, the stakeholders did not include any homeowner advocacy group, and this bill is very much not only controversial but un-American as well.  This is the second such bill brought by a state representative in the past 3 years, the other being HB 2441, the “minority control” bill in 2011, that was rightfully defeated in the Senate.

In January of last year HOA managers were put on notice by the AZ Supreme Court opinion (UPL Advisory Opinion, 12-01) on the Unauthorized Practice of Law, and one firm in particular, a member of two HOA special interest trade organizations, was found to have engaged in the unauthorized practice of law (in RE: Board of Legal Document Preparers v. AAM, LDP-NFC-09-L094 and LDP-NFC-10-L026). 

So, it appears, the problem of managers engaging in UPL activities is to be resolved by introducing a bill to “make it all good without any requirement for training and licensing!  This is a disgraceful bill! A bill that treats the good people of Arizona, who are subject to unregulated HOA private governments, as second-class citizens.  It insults the good people of Arizona!

Furthermore, HB 2371 goes on to allow “contractors” (that can not only be managers, but landscapers, pool maintenance people, etc.) of HOAs to represent HOAs before the Office of Administrative Hearings. It allows attorney fees to be awarded only for the Petitioner if he wins. Under the law, OAH is not permitted to award attorney fees, so this bill is needed to make it happen.

 But, it is only for HOA adjudication hearings and not for any other agency hearing!  With HB 2371, the unlicensed and untrained manager will get fees paid by the Pro Se homeowner who turns to OAH because of no attorney fees.   Records show that some 90% of the homeowners were Pro Se not using an attorney, while the HOAs were almost 90% represented by an unnecessary attorney. (Based on detailed OAH records for the first 66 cases in 2006-7).

 The purpose of OAH adjudication was to provide an increased level of judicial protections for homeowners in HOAs without the need for an attorney in an informal setting, and without the need to understand the rules of court.  The HOA attorneys have been trying for years to turn OAH into civil court proceedings under 100 rules found in some 200 pages of legalese. But, the bill does not require that the HOA manager learn and understand the civil rules or the law.  

Once more the citizen, the whole reason for the existence of a democratic system of government, is smashed down to the bottom of the food chain by an unconscionable bill.  A disgraceful and insulting bill!  The Senate committee cannot allow this bill to pass in good conscience.  It must be soundly thrashed.

HB 2371 will be heard in the Arizona Senate Government & Environment Committee on a Monday to be determined.

Why HOA reform advocates fail at legislative reforms

This Commnetary is in response to a comment to my book review of Colorado Senator Morgan Carroll’s, Colorado senator’s guide to effective HOA legislation.

Your comment is understandably emotional and angry, because of failed attempts at HOA reforms.  I assume you have read my commentaries on the basic theme that state legislatures are not friendly toward HOA reforms. But the book shows you how to throw it back at Carroll and the dysfunctional legislatures and hypocritical legislators.  Just take it from the mouth of the “enemy” and use it against her.  Show her as a hypocrite, if that’s what you believe.  I do it all the time with the Arizona Legislature, and a new strongly worded critique is on the way.

You are mistaken in stating that I praise Carroll as a friend of HOA reforms.  I praise her because the book shows the way to reforms, and similar advice has been provided by legislators in other states.  The problem has always been the failure of homeowner advocates to recognize the fact that this is power politics, just like you see on TV, and they must learn to play the game.  And Carroll tells you how.

Yes, the book implies that all upright and good standing representatives will come to the aid and do right by the people, if they speak out loud enough and in large numbers.  Carroll does not say “right is might,” because the laws do not deal with justice.   Legislators, except for a very small minority in isolated cases, do not take up the “Mr. Smith Goes to Washington” cause of the people that this ain’t right. Wake up guys! 

While small groups have spoken out in many states, they are not organized or powerful enough to overcome the paid lobbyists with their credentials.  But, over the years nobody really wants to organize a national HOA reform advocacy to counter the CAI propaganda.

Yes, there have been champions of HOA reform, but advocates fail to realize that these legislators must buck the powers that be at the legislature and win over the votes of a majority of other legislators. And this takes outcries by many people, not with gripes of “I wuz wronged!” but with valid arguments as to why HOAs are wrong for the state and the general public well-being.  And how to fix  these wrongs.  

This must be understood. The legislature does not get involved in your personal gripes! You must raise your issue to a general issue, a fundamental rights issue, before any legislature will get excited.

Learn from the book and take it to Carroll and show her “dual personality” in public, where it counts, and not here among others who know but do nothing.

State legislatures and HOAs: When will they ever learn?

It should not come as a surprise to anyone that state legislators have allowed the HOA legal scheme, which they have played a strong hand in supporting, to deny the equal application of the laws for all, and the loss of constitutional protections. 

Free speech, flying the flag, due process, clean elections, etc. have been denied by HOA regimes.  Even noted CAI member attorney, Adrian Adams, speaking about HOAs in the Davis-Stirling online Newsletter article, Animal Sacrifice: “Just as private organizations can restrict free speech, they could conceivably restrict religious practices that negatively impact other members.

The denial is basis on the specious and false argument of a “consent to agree.”  A consent that falls dismally short of meeting Supreme Court judicial scrutiny for constitutionality. All the HOA has to show is an HOA interest for the benefit of the entire community and the courts will find no problem, just as if the HOA were a government entity that has some legitimate interest in the issue.

Furthermore, legislators accept the argument that any validly passed CC&Rs amendment binds everyone including any dissenters, regardless of its relevance, bearing, or reasonable expectancy of the restrictions being imposed on owners.  It’s the “general government interest” approach. It appears that public government attributes are ascribed to the contractual HOA, with the contractual terms are being ignored.  All reform legislation is an attempt to restore those rights wrongfully denied the homeowners, on a case by case, HOA by HOA, state by state basis. 

HOAs are not de jure governments — not state entities.   But, they are de facto governments operating under state legislature protections, but in contrast to all other government entities, without constitutional protections.  HOAs are unrecognized governments as is Cuba, but functioning nevertheless every day.

When will legislatures learn?  When will they undertake an independent study of HOAs with a truly independent “think tank”?  Like the Arizona State’s Morrison Institute for Public Policy.[i]  When?  Perhaps never, since they don’t seem to really want to know, and perhaps because they know what the findings will show.

[i] “Morrison Institute provides public policy research for government agencies, private associations, nonprofit organizations, and communities. In conducting research, analysts draw upon a variety of disciplines and methods: collecting original data through public opinion surveys, interviews, and consultation with experts; and analyzing existing information through review of published research reports, current legislation, and statistical data.”  (See http://morrisoninstitute.asu.edu/about/about-the-morrison-institute).