CAI Calif. fears threat of artifical lawns to conserve water

In its June 8, 2010 email, CAI-CLAC (California legislative action committee), cries in desperation to stop government intrusion on the right, as they see it, for the HOA to restrict artificial lawns.  A mass rally is called for to stop this serious legal affront to HOA dominance of its members.

State Legislation Removes HOA Authority and Discretion

 Urgent request for “GRASS ROOTS” letters by this Friday

 Assembly Bill 1793 would prohibit associations from restricting or banning the installation of artificial lawns.  . . . The bill totally removes an association’s right to maintain a natural grass streetscape in order to preserve the ambiance and property value.  It will create friction in the association and opens the door to lawsuits.

 Among the reasons for CAI’s opposition to the bill, provided predominantly before its list of “other reasons” is,

 We need to stop the rush to judgment by some legislators who think they are simply saving water by voting for this bill, when in fact the bill creates serious problems and will cause unintended negative consequences. 

 (Please note CAI’s SOP (standard operating procedure) to resort to scare tactics, “the sky will fall”, some dreadful, unsubstantiated consequence will befall the HOA.)

 It’s a water conservation issue to promote the general welfare, including for the benefit of HOA owners who, don’t forget, are still part of the general community.  But, CAI doesn’t see it that way.  CAI does not see HOAs as part of the general community, and therefore, sees no obligations to the to the town, the city or the state to be a good corporate citizen.  The sentiment of the CAI cry in this email is nothing more than:  How dare the Calif. Legislature tell HOAs what to do without our approval?   

 In this email, while CAI proclaims to fight for the noble cause of local, direct democracy,  “the voice of the people”, CAI has actively promoted and encouraged state legislatures to adopt some version of a top-down, parallel set of laws just for private, de facto HOA governments, such as Davis-Stirling, or UCIOA.  The April 2006 media release by CAI HQ said,

 It is the policy of CAI to recommend that when state governments amend their basic community association development laws they consider the need for updated and comprehensive legislation to regulate the development of community association housing consistent with the above goals. Moreover, in undertaking such review, state governments are urged to consider and give favorable treatment to one or more of the Uniform Community Association Acts.

 Furthermore, in this email, CAI advertises, Serving 3,000,000 California Households in Condominiums and Homeowner Associations.”  This is outrageous and misleading statement! It may serve them as vendors, but not as representatives of these households before public entities.   Even the HOA board of directors does not represent the owners before public entities.  The California Legislature represents all the people of California, including those living in HOAs.  CAI cannot say that it represents HOAs/condos per se, either, since it is not permitted to have these categories as members. 

 The CAI dogmatic ideology is that HOAs are sacrosanct and untouchable, unless approved by CAI, as documented by the  positions taken by CAI lobbyists before numerous state legislatures over the years.   CAI seeks power over HOAs! 

 The California legislators should bear in mind that these canned letters will be coming from the CAI stalwarts and HOA true believers, which will not be a valid representation of the people in HOAs.

  

A digression — checking what the numbers mean

Now, pay attention carefully.  Using this figure of 3,000,000 households (units in Census terms), and CAI and Census data of 2.6 persons per household, gives rise to a calculated  7.8 million people in HOAs/condos.  Also, corroborating, my research[i] on the national ration of HOA population to total US population of 19.6% , yields about 7.2 million people in HOAs — close enough for our investigation.  Consequently, based on the 3 million household figure,  CAI is claiming that it serves almost all of the HOAs/condos in California. 

 Continuing, taking my research figure of the average number of residents in an HOA, nationally, of 211, then there should be 36,997 HOAs/condos (low end).  Cross checking, using the research average of 82 units per HOA, there would be some 36,600 HOAs in California — not bad results.

 Yet, nationally, CAI with its 30,000 proclaimed members, and assuming that each member lives in a separate HOA/condo, would have a membership that contains, at most, about 10% of their stated 305,000 HOAs/condos in this country.   Applying the 10%  membership ratio, then CAI has a member, at most, in some 3,650  HOAs.  (Applying the 211 figure to 3,800 HOAs yields about 770,150 people in HOAs that have a CAI member).

 Notes


[i] cf. Have HOAs hit a growth plateau?, May 22, 2010.

HOAs and unauthorized practice of law

I just received a copy of a letter from a homeowner in which the HOA manager explains the rights of the homeowner under the CC&Rs.  This is not an uncommon occurrence, where untrained and uneducated managers, even if they are  a Certified Legal Document Preparer (independent paralegal), make such statements in response to a homeowner’s request  “to know”.  The average homeowner is not familiar with the law and usually doesn’t understand what the rules mean or say.  And, obviously, the same goes for these HOA managers, including those with those CAI “certified” as to training designations — PCAM, AAMC, etc.
 
The manager, in defense of a board rule change, had misdirected the homeowner by quoting a section of the CC&Rs that grants the board to the right to create rules and regulations.  However, the issue at hand and pointed out to the manager, limiting the number or dogs, is not specified in the CC&Rs, which simple says dogs may be kept.  Consequently, the CC&Rs would have to be modified accordingly to specify any limitation, not by a vote of the board, but by the members.  This is both unethical and an outrageous unauthorized practice of law, which I shall say once more, occurs all too frequently under HOA regimes.
 
The letter did not contain a disclaimer that, “I am not giving legal advice or opinion, and I am not an attorney nor employed by an attorney.  You should seek independent legal advice from a competent attorney.”  (Remember that the HOA attorney is just that, the attorney for the fictitious HOA and not for the opposing party, the homeowner.) This simple disclaimer never appears on statements made by HOA managers, in violation of Arizona, and all other state UPL (Unauthorized practice of law’) restrictions.  Under  the Arizona Rules of the Supreme Court, R 31(a)(2)(A), “‘Practice of law’ means providing legal advice or services to or for another by: (5) negotiating legal rights or responsibilities for a specific person or entity.”
 
Rule 31(a)(2)(B) states:  “‘Unauthorized practice of law’ includes but is not limited to:  (1) engaging in the practice of law by persons or entities not authorized to practice pursuant to paragraphs (b) or (c)”
 
 
Subsections (b) and (c) state that UPL occurs when a person is not a member of the State Bar, including a disbarred or restricted Bar member.
 
 
IMPORTANT
 
If you receive any such letter from a manager or management firm employee, and that letter does not contain a disclaimer, please file a UPL complaint against the manager.  This is the only way to stop this practice.  It is a small thing you can do to help yourself and all other people living in an HOA.  If a director writes such a letter, then he risks personal liability for his error since he did not consult an attorney.  If he claims “acting on the advice of the attorney”, demand to see it in writing!  If he does not provide it, then he is not acting in good faith as required of directors of nonprofit corporations.
 
 

Qui Pro Domina Justitia Sequitur 

 (“who prosecutes on behalf of Lady Justice?“, DOJ seal)

 

 
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HOA homebuyers MUST have a competent lawyer before they buy

 

Not only must prospective buyers of homeowner association controlled homes retain a competent lawyer, if one can be found who will represent the buyer, but must also understand the fact that covenants are being constantly interpreted by the courts.  That means whatever you or your attorney think you’ve agreed to, assuming unlike today the buyer doesn’t even have to see the CC&Rs in order to be bound by them, the court may give any entirely different spin on the meaning of the covenant. 

That’s called making new law.  And that’s on top of existing legal precedent heavily in support of HOA governments, and against the privileges and immunities to which we all are supposed to be entitled.  To a very good extent, buyers of HOA homes are getting “a pig in the poke.”

When further considering the argument, like CAI and HOA promoters like to argue, that buying a home is buying an investment, this HOA investment is a very bad deal for an investor.  Recall that even the common law authority on servitudes (covenants)[i] recommends that in the event of a conflict between servitude law and constitutional law, servitude law should prevail.  There goes any vestige of any rights still retained by a homeowner.

In a recent example of “surprise” by the Wyoming Supreme Court[ii], owners who sued their HOA for imposing unreasonable requirements on modifications to their home, and won on that issue, were still denied their breach of contract claim.  Now follow carefully.  The trial court accepted the claim of unreasonableness and stopped there, not addressing the other claim of breach of contract and payment of attorney fees.  The supreme court took the position,

 While we have often explained that restrictive covenants are contractual in nature . . . that does not necessarily mean that a homeowner is entitled to recover contract damages against a homeowners association. Ms. Dwan has not identified any provision of her CCRs that would allow her to claim damages against the Association. She has not provided any legal authority, from Wyoming or any other jurisdiction, supporting her claim for damages.[iii]

The court distinguished between equitable relief  — this ain’t right — from a contract with its explicit wording and absence of wording, which doesn’t have to be equitable.  The board can act unreasonably, but they are not punished for doing so.  (Contrast this with the right to punish the homeowner with fines, which is granted to the HOA under both the CC&Rs and almost every state HOA statutory Act).  Once again, the developer’s  “take it or leave it” contract does not protect against board actions by providing a penalty as a detriment against any such further actions. Once again, where wrong-doing was found against the HOA, the CC&Rs adhesion contract favors the HOA with its silence on damages in the event the homeowner does win a lawsuit.  

   Notes


[i] Restatement Third, Property: Servitudes, § 3.1, comment h.

[ii] Dwan v. Indian Springs Ranch HOA, No. S-09-0064, (WY June 3, 2010).

[iii] Id.

AZ ATTY Gen defends SB 1070, but couldn’t defend OAH constitutionality

The Arizona Attorney General, Terry Goddard, who is running for Governor, announced today that he feels compelled to defend Arizona even though he’s against the bill. But he didn’t lift a hand to defend the constitutionality of the OAH bill back in 2008-9, even after having submitted a brief in defense of the statute in an exactly the same prior case. I guess he didn’t believe in an independent tribunal to hear HOA complaints. HB 2428 gave homeowners a more level playing field for adjudication of HOA disputes, without a lawyer, and without having to know the Rules of Civil Procedure, which favored teh experienced attorneys. Perhaps it was the 42% victorieswon by homeowners that was disturbing to the powers that be.

Furthermore, just this past session, the legislature passed HB 2774 which declared that the Attorney General or legislative leaders cannot be compelled to defend the constitutionality of statutes. So why is he now finding it his duty to defend a statute he doesn’t believe in? Oh, he stated today that “It’s his duty.”

I guess Arizona believes in “equal justice under the law” for those the AG chooses. Arizona demonstrates that it is under the rule of man, not law.

See The State of Arizona will not protect buyers of HOA homes! and

Arizona’s new “Take That George!” law: officials don’t have to defend HOA statutes

Utah court believes in justice against developers

A state Supreme Court believes in doing  justice rather than in perpetuating dated precedents. The Utah SC clarified the air in this case of developer-sellers versus HOAs over construction defects.  The association was seeking recovery of damages due to defects that became apparent after the developer turned the association over to the membership.  The court said,

 The law should be based on current concepts of what is right and just and the judiciary should be alert to the never-ending need for keeping its common law principles abreast of the times.

  (It is time for the ancient 1946 Marsh v. Alabama holding pertaining to the “public functions” test, based on company towns, be buried deep, deep beyond resurrection.  There are new tests for state actors that will do well against private HOA governments).

  Here are some of the gems from the 2009 Davencourt at Pilgrims Landing Ass’n v. Davencourt at Pilgrims Landing, LLC (221 P.3d 234),

[W]hereas for a buyer the purchase of a new home is a significant and unique transaction. . . . To apply the rule of caveat emptor to an inexperienced buyer, and in favor of a builder who is daily engaged in the business of building and selling houses, is manifestly a denial of justice.”). Given these modern realities and this disparity, “[a] home buyer should be able to place reliance on the builder or developer who sells him a new house.”

 Hence, in protecting the innocent home purchaser by holding the responsible party accountable, the law has come to recognize that no longer does the purchaser of a new residence stand on an equal bargaining position with the builder-vendor or developer-vendor.

 And that should go for any issue relating to CC&Rs, as it is similar to the holding against adhesion contracts where one party has power over the weaker party.

 In regard to the developer’s fiduciary duties to the homeowners,

 The Restatement (Third) of Property offers guidance. It recognizes that a developer owes certain limited duties to an association and its members. (Section 6.20 of the Restatement).

 While the developer thus should not be a fiduciary in the broadest sense, we are nonetheless convinced that the developer’s control in this nonprofit association requires certain interests of the members and the association be protected. See id. This is achieved by the limited fiduciary duty.

Please understand this is a state court decision, and will serve as precedent elsewhere if there is no precedent  for the state in question.