Category: Opinion

Posts by GKS

Why do we still have conflict within HOA communities?

A short history

The current version of a utopian community, homeowners associations, has it origins in 1964 with the release by the Urban Land Institute (ULI) of The Homes Association Handbook.  In 1973 the Community Associations Institute (CAI) was formed by the HOA promoters to deal with a variety of persistent problems with HOAs.  In 1992 CAI stopped being an educational nonprofit (501(c)3) tax-exempt organization and became a business trade organization (501(c)6) (which is not readily evident from perusing its web pages — only its Research Foundation is indicated as an educational organization) to deal with continued problems and to promote the business interests of it members.  In 2005 CAI dropped its HOA category of membership since HOAs are consumers of CAI services from its vendor members, which raised  questions about its tax exempt status.  Its new “volunteers” category are HOA board members whose dues are paid by the HOA, with discounts depending on the number of members joining CAI.

 

CAI continues to advertise: We are the recognized experts for community association governance and management and the first and only national organization created specifically to meet the needs of all community association stakeholders.  (Member Benefits web page).

 

 

Yet, today, some 36 years later, CAI still feels the need to address conflict within HOAs. (See its 9/08 webpage below, “Conflict”).  Why 45 years of continued conflict?  Why has CAI failed to bring about its mission of creating healthy, vibrant, responsive and competent communities (see last paragraph of Conflict)?  Apparently several states and cities don’t seem bothered by this failure by CAI.   Florida, and recently Virginia, have chosen CAI to educate HOA directors and to license managers. And a coalition of cities around Phoenix, AZ are providing education by CAI members (The Learning Centre, the HOA Academy).

 

In order to answer this question of continued conflict we need to look deeply into the fundamental legal scheme or concept of planned communities with their HOA form of authoritarian government, and “constitutions” that deny homeowners the rights and freedoms available to them outside the HOA.  We need to examine this legal scheme to determine what systemic factors (those factors built into the very structure of the HOA concept) that have proven, after 45 years, incapable of being solved by CAI, or any state legislature.

 

 

====================================================

Note: Black type is the original CAI statement.  Blue type are my comments.

Community Association Conflict

 Rather than David-versus-Goliath conflicts, as occasionally portrayed in the media, disputes in community associations are disagreements among people. Differences of opinion among homeowners, or between individual homeowners and their community associations, often reflect the challenge of balancing the preferences of the individual homeowner with the best interests of the community as a whole. Managing this critical and delicate balance is often the essence of effective community leadership and frequently the greatest challenge facing volunteer boards.

Under the HOA governing documents, the HOA has all the powers and is required to maintain property values, and they say nothing about the civil rights and protections that our Constitution offers citizens when they do not live in an HOA.  The courts look to any such “Bill of Rights” wordings in the governing documents, and when not finding any, side in favor of the board.  “Balancing the preferences”, as mentioned above, is not legally binding on the board.  If the board seeks to function with concerns for the  individual rights of homeowners, a legitimate concern of public government, it is prohibited by virtue of the governing documents.

 

Community association governing documents – typically bylaws or convenants, conditions and restrictions (CC&Rs) – protect all homeowners. People living in an association-governed community have contractually agreed to adhere to the rules in that community. CC&Rs are created to maintain community standards, protect property values and encourage a sense of community stewardship. They would cease to exist if the majority of residents did not want them.

The basic legal structure of the HOA is the governing documents that are held to be a binding contractual agreement between the HOA and homeowner, although this “binding” by constructive notice fails all tests under contract law for valid contracts.  There is no signature, no “give and take” since the CC&Rs are a “take it or leave it” adhesion agreement; no meeting of the minds; and contains vaguely worded “agreements to agree” that are not valid contracts, like any and all amendments bind the homeowner without his consent even when depriving him of his property rights. 

There are no state agency warnings or notices highlighting the loss of rights and protections within the HOA, as we see with truth in lending, truth in advertising, etc.  Rather, HOA defenders resort to a public government analogy by declaring that the fact that the homeowner remains in the HOA is an implied consent to be governed.  But, surrendering one’s rights requires explicit consent with full understanding and knowledge.

 

The importance of complying with association rules cannot be overstated. They are developed and enforced so associations can meet the established expectations of all homeowners. At the same time, we advocate open, constructive and respectful dialogue and urge all parties to be reasonable, flexible and open to compromise when disagreements do arise.

Once again, the documents by which the HOA board can legitimately act are contained in the HOA’s “constitution”, the governing documents.  There is little room to compromise and be flexible on the part of the board while adhering to its obligations to protect property values.  And when disagreements arise, the homeowner must face only “an opportunity to be heard” by the HOA powers that be, since the governing documents do not provide homeowner due process protections as found in the public arena.  There is no independent tribunal with the opportunity to confront and question witnesses.

 

Communication and education are critical elements of successful homeowner-community association relations – and the best way to minimize misunderstanding and uncertainty. Education involves making every effort to convey timely, understandable information about codes, policies and procedures to all homeowners and non-owner residents. Open communication, both to and from association leaders, is the best way to identify and resolve issues before they become open conflicts.

Such education by CAI educated groups focuses on how to live within the oppressive regulations and covenants of the authoritarian HOA regime.  Homeowners are told this is the law, and there is no mention of the injustice and loss of rights resulting from living in an HOA.   This form of “education” reminds me of the mandatory totalitarian indoctrination classes designed to influence the mindset of the masses, and especially of the children.

For example, homeowners are not told that they have unknowingly pledged their homes as collateral in order for the undemocratic, authoritarian HOA regime to survive.  Just stop paying your assessments, or try to put them in a trust fund while waiting to resolve a dispute with the HOA, and see what happens.

 

Rather than taking sides in individual disputes, CAI’s mission is to foster vibrant, responsive, competent community associations. One way we do that is by encouraging homeowner involvement. Whether a community is self-managed or able to hire professional management services, active homeowner involvement is essential. We reap from our communities what we are willing to put into them, in terms of both quality of life and our financial investment. Volunteer to help, serve on a committee or run for a seat on the governing board. It’s your home and your neighborhood!

Here we have the practical fallacy of homeowner involvement that involved homeowners will make things all for the better.  It presumes that the volunteers are first indoctrinated into the “HOA is good” mindset.  It also ignores the fact that the  level of involvement required in an HOA is not attainable in public elections. 

CAI falsely states in the second paragraph of its Conflict that the CC&Rs would disappear as a result of the democratic voice of the majority. Well, CAI knows that super-majorities are needed to amend the CC&Rs, and not a simple “voice of the people”.  And what if the members what to dissolve the HOA entirely, they must have a super-majority that can be as high as 90%. Or, maybe the voice of the people want to dissolve the HOA prior to a 25 or 30 restriction on termination of the HOA?  I can hear the board saying, “Gee, we would like to do that but, you see, you agreed not to do it.  See, right here it says so.”

 

There are no provisions for fair elections or the distribution of member lists for contacting the voters.  Yet, the HOA has all this available to it, as well as using HOA funds to advance its positions.  Volunteering in this corporation authoritarian environment presents a major problem for reforms. 

 

 CAI media contact: Frank Rathbun

 

 

Conclusion

Unless these systemic problems are corrected we will continue to have conflict, homeowners will continue to return to their legislatures seeking to restore lost rights, and this HOA-land form of independent governance will continue to erode the America of our Founding Fathers.

(See Establishing the New America).

 

reference:  http://www.caionline.org/searchcenter/pages/results.aspx?k=Community%20Association%20Conflict (Jan. 8, 2009).

HOAs: the failure in the American Experiment in democratic self-government

During my Jan. 5, 2009 meeting with the Arizona Department of Fire, Building and Life Safety, the agency charged with processing HOA complaints for the Office of Administrative Hearings (OAH) adjudication, the Director indicated that HOAs provide a benefit to the community.  I replied,  “Yes, but these goals can be accomplished without private contractual agreements that function outside the Constitution and its protections of individual rights.”  (See A proposal for the “Muni-zation” of HOAs; Stop developers from granting private government charters). Namely, special tax districts and home rule statutes.
 
HOAs allow such a contradiction to the Constitution, supposedly the supreme law of the land, with respect to ex post facto CC&R amendments (that sacrosanct “contract” is meaningless when it can be changed without owner consent), the absence of due process protections by a just and independent tribunal (such as OAH), the unequal justice under the law, and the surrender of rights and freedoms without explicit consent, to name a few.
 
What would Alexis de Tocqueville (Democracy in America) say, if he toured America today as he did in 1832,  about the American Experiment and homeowner associations?  
 
Additional reading on the New America of HOA principalities and the evolution of American society and governance, a growing failure of the American Experiment in democratic self-government established by the Founding Fathers, can be found:
 
 
 

No HOA police force — no HOA government!

In rebuttal to Mr. Dranias’ defense of his position on private HOA governments (see Goldwater Institute: regulating HOAs “stands Constitution on its head”, I am quite flattered that he mistakenly ascribes the argument of secessionist HOAs to me rather than to its originator, Robert A. Nelson, as indicated in my Commentary.
 
In his reply, he makes a fine distinction in reference to a government based on the use of a police force — a guess he means the right to lockup people — by municipalities and not by HOAs, which “justifies tailoring the principles found in the Bill of Rights to more tightly constrain the vast regulatory powers of local governments, rather than HOAs.”  And that tailoring apparently is, based on prior statements, “no contract interference.”  Mr. Dranias goes much too far in taking such a narrow view of what the Bill of Rights and Constitution are all about — and it ain’t merely contract interference.
 
As to his reference to “Staropoli’s mantra that an HOA is a private ‘government’ does not make it so” is quite correct, and neither does The Goldwater Institute’s lofty pronouncements.  Let’s debate the private government issue and related issue that HOAs are state actors.  Let’s not be surprised at the extent of contrary political and legal thought supporting the position that HOAs can be found to be state actors and be bound by the Bill of Right as any other government entity.  The published US Supreme Court criteria for state actors, not having been tested in court, include: a close nexus; symbiotic relationship; intertwinement with the operations of the entity; cooperation, support or coercion. An examination by a lay person can easily see such grounds based on a review of state laws. 
 
Let’s bring this important matter to the attention of a national organization that will sponsor such a discussion or conference and who will invite all parties to the table — and and means including pro-homeowner authorities and not this average Joe, and excluding all those property law attorneys who have not recognize arguments that HOAs are private governments.  

The 40 years of silence must come to an end now that some 20% of the US population live in HOAs.  Let’s get behind “transparency to the people” and “let them know what’s going on.”

Goldwater Institute: separate and unequal constitutions for HOAs

In reply to my Arizona Capitol Times Commentary of December 12th, Constitutional Center Director Nick Dranias believes HOAs are bona fide consensual relationships and regulating homeowners associations would “stand the Constitution on its head.”  (See Goldwater Institute: regulating HOAs “stands Constitution on its head”).

In the late 1950s the Southern states enacted a Poll Tax and instituted certain “tests” in order for citizens to be eligible to register to vote.  No federal or state laws were violated, since the states were permitted to determine the methods for registering citizens, so long as it was not based on race (15th Amendment).  Of course, the tax was set at a level very few Blacks could afford to pay, and among the test questions were such gems as (LBJ: Master of the Senate, Robert A. Caro, p. x, 2002).
Name all of Alabama’s 67 county judges.
What was the date that Oklahoma was admitted to the Union?
How many bubbles in  bar of soap?
While legal, these state laws were intended to keep Blacks from voting, and were plainly an unjust and unfair vehicle to support the will of the local power groups.  Today, we can ask about the intentions and use of privately developed HOA restrictive covenants, and the arguments by the legal-academic aristocrats promoting the supremacy of servitude laws over constitutional law:
Can private, contractual governments be used to  circumvent Constitutional protections?  If so, then what becomes of the Constitution?  Can the people opt-out of the Union?  President Lincoln didn’t think so, and Americans paid dearly to make that point.
The Goldwater Institute’s continued dialog on HOAs and the Constitution reflects the view of HOAs as independent principalities existing outside the Constitution, and thus establishing a new order for Americans, a New America of HOA-lands.

Goldwater Institute: regulating HOAs “stands Constitution on its head”

In reply to my Arizona Capitol Times Commentary of December 12th (see The HOA experiment in privatized government is alive and well, and growing), Constitutional Center Director Nick Dranias believes HOAs are bona fide consenual relationships and regulating homeowners associations would “stand the Constitution on its head.”  ——

HOAs are not private governments

By Nick Dranias

Friday, December 19, 2008

George K. Staropoli in his recent commentary, “Just what is the Goldwater Institute trying to say,” exhibits a deep misunderstanding of both the Institute’s reform proposals and constitutional law when he proclaims limitations on the power of local government will somehow lead to “secessionist” homeowner’s associations, which could then “circumvent the Constitution.”
Staropoli’s mantra that an HOA is a private “government” does not make it so. There is a fundamental difference between local governments, such as municipalities, which enjoy geographical monopolies on the use of force through their police powers, and HOAs, which clearly do not have such powers.
That difference is what justifies tailoring the principles found in the Bill of Rights to more tightly constrain the vast regulatory powers of local governments, rather than HOAs. Indeed, Staropoli’s radical notion that the principles found in the Bill of Rights should instead be applied through legislation to regulate private, consensual relationships stands the Constitution on its head. The Goldwater Institute stands proudly behind its idea that the equivalent of “municipal constitutions” are needed to reform local government.

####

Look for my rebuttal, coming soon, calling for a national debate on HOAs and the Constitution:   Can private, contractual governments be used to  circumvent Constitutional protections?  If so, then what is the purpose of the Constitution?