Opinion – Page 128 – HOA Constitutional Government

Legislative protection of HOAs: replacing US organic law with HOA organic law

Organic law is the fundamental basis of a government. The Homes Association Handbook and UCIOA constitute, in my view, the organic law for HOA governed planned communities. In contrast, the U.S. Code defines the organic laws of the United States to include the Declaration of Independence, the Articles of Confederation, the Northwest Ordinance, and the U.S. Constitution. (US Statutes At Large, 1789 –1875, Vol. 18, Part I, Revised Statutes (43rd Congress, 1st session), p. v and vi). The organic laws of HOA-Land are replacing the organic laws of the US as applied to local government.

Arizona protectionism

How many times have homeowners sought justice before the legislature only to be told that they have recourse to remedy any slights by “voting the bums out”? Yet, when the time came to put some teeth into fair elections laws for HOAs, laws that would allow a fundamental function of a democratic government to work properly, the Arizona Legislature answered with a resounding NO! (21 – 9 final Senate vote on HB 2160). Where is the justice? And justice is the hallmark of a legitimate government.

The Arizona Legislature, for the fourth or fifth year, obstinately refused to tell HOAs hands off regulating public streets, even with respect to parking cars protected by municipal ordinances. Maricopa County Sheriff Arpaio, who on numerous occasions vehemently stated that he upholds all the laws, rejected policing public streets in HOA-Lands. SB 1113 died, and HB 2030 is sitting in limbo waiting for a floor vote for final acceptance.

As of this date, only 2 bills of the 19 HOA bills were sent to the Governor, and one was vetoed as “too confusing” for the HOA board to deal with. HB 2484, which was amended by the conference committee to make it more HOA attorney friendly, which means more homeowner unfriendly, is now a “NO” bill. Of the 5 Arizona HOA bills in this session that provided for penalties against the HOA governments, none were found acceptable: HB 2160, HB 2484/SB 1468, HB 2455, HB 2731, and SB 1240.

The HOA can do no wrong

It is quite evident that HOAs are de facto state-protected “sanctuaries” — de facto independent principalities by the failure of legislatures to pass enforcement bills against HOA board violators. The HOA is treated by the legislature like the sovereigns and kings of long ago – the HOA board can do no wrong, no need for checks and balances, and no need for accountability. It appears that the HOA boards have become Godlike in the eyes of the legislators!

And everywhere the public interest people, the legal-academic aristocrats and current day Philosopher Kings, who clamor for individual and private property rights see no evil, hear no evil, speak no evil. It appears that, “unaccountable HOA government is better than public government with its protections,” has become their dogmatic principle. The Goldwater Institute promotes local government by means of restrictive covenants. “A model law authorizing a transition from government-controlled local zoning and planning regulations to private restrictive covenants.” (See the 2011 report, Model Legislation, Decentralized Land Use Regulation Act).

The social contract is disappearing

It is not too difficult to realize that this country has been on a regressive, slippery slope path to a governmental system very much like the rejected Articles of Confederation of some 225 years ago — that loose collection of colonies that our Forefathers rejected as unworkable. And it appears, with the rhetoric abounding here and elsewhere on other constitutional issues, we are rejecting the social contract and returning to a state of nature. The Social Contract (“Man was born free, and he is everywhere in chains”) of Rousseau and John Locke has been slowly falling by the wayside, little by little.

The social contract theory of government maintains that individuals unite into political societies by a process of mutual consent, agreeing to abide by common rules and accept corresponding duties to protect themselves and one another from violence and other kinds of harm. The US Constitution and all state constitutions are examples of the social contract theory, as opposed to the various HOA statutory Acts that are based on the Uniform Common Interest Act (UCIOA). UCIOA has served for state laws in a handful of states, while other states have modified it somewhat and still others used it as a basis for their statutes.

The initial UCIOA of 1984, revised in 2008 with a questionable separate and detachable model Bill of Rights Act, flowed from The Homes Association Handbook of 1964, that joint effort by FHA, ULI (formerly the National Real Estate Foundation), and NAHB. (The Handbook was prepared with the “collaboration” of such entities as, the Veterans Administration, The Office of Civil Defense, and the Public Health Service).

How did it happen?

Milton Mayer best describes what is happening in America when he sought answers as to why the good, average people of Germany let the Nazi Party take control prior to WWII. His words are applicable to today’s HOA-Land. In 1995, in They Thought They Were Free, he wrote,

What happened was the gradual habituation of the people, little by little . . . . This separation of the government from people, this widening of the gap, took place so gradually and insensibly, each step disguised. . . . [Mayer believed that the good people went along] in the usual sincerity that required them only to abandon one principle after another, to throw away, little by little, all that was good.

Welcome to the New America of HOA-Land

And you’d better believe it!

AZ Gov. finds bill too confusing for HOA boards and managers

AZ Gov. Brewer found HB 2513 too confusing for HOA board and directors, so she vetoed the bill.

The effect of this bill is unclear as to what is permitted or prohibited in terms of renting and the information to be provided to an association regarding an owner’s renter. This would result in confusion for association boards and property management companies who are legally responsible for managing communities.

HB 2513 would have added a new section to the condo and HOA statutes, ARS 33-1260.01 and 33-1806.01. Subsections A an B seem rather straight forward — deal with the designated agent. What’s the problem? Subsection C requires certain information on the renter to be given to the HOA, such as names, number in family, car license plates, and ages if in an age restricted community. No problem here either; rather straight forward again.

Subsection D allows for a measly $25 transfer fee, as compared to fees of $500 – $1,200 on a sale. It also prohibited any “new” types of fines for renters. H’mmmm. Restrictions on the HOA?

Now we come to the last subsection, E. It prohibits the HOA from any of the following:

1. copies of the rental agreement, credit report or other personal information.

2. having the renter sign a waiver of or limitation on his rights due process rights.

The bill is silent on any guarantee that the renter has the same rights and access to the amenities as an owner, except voting rights. This is only fair as it would balance the playing field if the renter is subject to fines. But, the bill is silent on this renter protection.

I AM confused about what’s so confusing, or was it really another issue, one of again protecting the HOA by prohibiting an invasion of renter privacy — some would say it would have prevented HOA snooping. To understand what appears to be happening here, let’s look at ARS 33-1805, HOA record access by members, and see the degree to which the HOA is protecting itself using statutes that allow for a lack of transparency.

Subsection (B) contains restrictions on member access to HOA records that includes,

“4. Personal, health or financial records of an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association.

“5. Records relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association.”

This is clearly protective of the HOA, and its employees and officials acting on behalf of the HOA, and is apparently not too confusing or too complicated for the HOA directors or managers. I mean, don’t they frequently use their attorneys to defend their views of the laws?

So, what’s the real story Governor Brewer? Why are you denying a just and fair procedure to protect the individual rights and freedoms of residents and owners, while at the same time having no issue with protecting the HOA from sunshine laws and transparency? Something is wrong here! It’s plain and simple that your veto is just another act consistent with the Arizona public policy of protecting HOAs from its members who “pay the freight.”

Why has pubic policy favored HOAs with their denial of member rights and freedoms??

Could it be the effect of a corporate – legislator alliance? Last year, ALEC, the American Legislative Executive Council, proposed model legislation that promoted local government by means of restrictive covenants. Yes, that’s right! And supported by none other than The Goldwater Institute.

A model law authorizing a transition from government-controlled local zoning and planning regulations to private restrictive covenants.

(See the 2011 report, Model Legislation, Decentralized Land Use Regulation Act).

The following quotes are from the Arizona Capitol Times article by Jeremy Duda,

ALEC, a conservative state lawmakers’ organization known for drafting model legislation for members to sponsor in their respective states.

“John Loredo, a former Democratic legislator, said ALEC woos lawmakers with trips, fancy meals and expensive gifts to promote its ‘extremist agenda.’

With many of the 56 Arizona legislators – all Republicans – who are ALEC members” [That’s 56 out of 90 legislators!]

See APS ending ALEC membership; SRP considers doing same.

Wrongful death suit filed against California HOA

A wrongful death suit was filed against California HOA by homeowner’s family. As I wrote in, If Trayvon HOA is sued, who should share the blame?, there’s a lot of blame to go around for creating an atmosphere that the HOA has a “free ride” and is immune from accountability.

According to the lawsuit, the defendants knew by September 2009 that Olga Martinez had a restraining order against her husband, Napoleon E. Castro, and that he posed a potential danger to her.

It was expected that defendants would provide a level of care in whom they admitted to the secured housing area in the gated community and restrict unauthorized visitors,” the suit states. “Defendants breached their duty of care by permitting …Castro to enter the building.”

(My emphasis).

Daughter of slain Pacoima woman files wrongful death suit against condo complex’s HOA

Looking for justice in an HOA? Look here first!

In the recent California case, Sui v. Price, the plaintiff owned a van for 12 years, and parked it in their reserved parking space. For the past 4 years, the van was inoperable due to a damaged engine, but remained locked in the parking space.

In 2006 Price, the HOA president, caused an amendment to the Rules prohibiting inoperable cars to be approved, and had the van towed. Where have we heard this before? A $1,700 fine was levied on Sui, which affected his credit rating and ability to refinance his home. The homeowner sued for breach of contract and several tort claims, based on an intent to harm the plaintiff, and sought $58,000 in punitive damages. Another case of the effects of ex post facto amendments, when the doctrine of estoppel by laches would be very applicable in favor of the homeowner.

There is no statement of ”an unsightly intrusion” caused by the van with a damaged engine — no fact of a beat-up body, or no tires, etc. California law allows the removal of a vehicle in violation, presumably after 96 hours of notice. The complaint was dismissed. The court dismissed the fact that Sui was just one individual with an inoperable vehicle, and that the CC&Rs prohibit rules that discriminate against member. Forget about the holding that the CC&Rs supesede the Rules.

The court only looked to the the reasonableness of a covenant, relying on,

Simply put, there is nothing unreasonable about prohibiting the open, long-term parking of disabled vehicles. The association was perfectly reasonable in prohibiting this unsightly intrusion upon the aesthetics of their common interest development. (emphasis added).

And that is the danger of the “general interest or general purpose” doctrine – almost anything can be rationalized and justified when isolated and only considered by itself. So the court chose – it was a validly passed amendment, and those other, unaffected members, could undo the amendment. Is this communalism or socialism?

We see no reason to apply a different test for reasonableness of an association’s operating rules, especially since a rule adopted by the association’s board may be reversed by majority vote of the homeowners at a meeting called on petition of only 5 percent of the separate interests in the association. (emphasis added).

Here again the court diminishes individual rights for a perceived common good of the community in what many would call socialism. It’s disturbing that the homeowner in these cases is not compensated for a loss in benefits by being a member of the community, while others are held to benefit. Another overlooked requirement for upholding valid amendments.

In the public arena, the homeowner would have received compensation for this “taking.”