Category: Opinion

A review of recent media reporting on HOA incidents and developments reveals a noticeable, favorable trend in attitudes.  In the past, going back to just the 2000 – 2001 time frame, the media only interviewed HOA attorneys, many of whom were CAI members, but this important fact was not revealed to the readers/viewers.  They portrayed a just and rightful HOA board having to deal with troublesome, disgruntled homeowners who just didn’t know how to get along in an HOA.

Now, the media is reflecting the actions and decisions of these boards, including defensive answers and their justifications for their actions in spite of new state laws created to protect homeowner rights.  For example, in spite of new laws protecting the rights of homeowners to fly the American flag, homeowners are still being denied the right to fly the American flag.  What is finally being reported to the public is the legal, but unfair and unjust nature of the governing documents and state laws that create homeowners living in HOAs as second-class citizens. 

While the HOA boards and supporters, led by the national lobbying trade group, CAI, are still there attempting to defend this state of affairs that has produced a New America, they are finding it harder to convince the public of the righteousness of their arguments.  The media are beginning to expose the CAI view that HOAs are really businesses, which is shocking to many homeowners. And the fact that these private governments are protected from the application of the Bill of Rights because the courts have held the covenants to be binding contracts, yet the homeowner has not signed any such governing documents. The media are also exposing the fact that these governing documents, the CC&Rs and by-laws, do not explicitly contain wording to alert the homeowner that he is “willingly, and with full knowledge, surrendering his rights and freedoms” as claimed by HOA supporters.  (What is very disturbingly is that the state legislatures do not seem to see any problems in supporting and mandating HOAs that deny their citizens many rights and freedoms that other homeowners still enjoy).

In an earlier Commentary, “Continued national HOA problems and the failure of the media”, July 2007, contained a quote from a NY Times Executive Editor who spoke of the role of the media,

 

Our job is not to ’support’ our leaders, not to buy in to any administration . . . but our job should be to figure out what they believe and why, and how all of that shapes the policies they make. We are obliged to get past the labels and slogans.

 

This role of the media, and the special status granted to it by the First Amendment to the US Constitution as protector of the people, and not of  any government whether federal, state or private HOA government, was well stated by US Supreme Court Justices Black and Douglas.

In the First Amendment the Founding Fathers gave the free press the protections it must have to fulfill its essential role in a democracy. The press was to serve the governed, not the governing . . . The press was protected so that it could bare the secrets of government and inform the people. Only a free and unrestrained press can effectively expose deception in government.

NY Times v. U.S., 403 U.S. 713 (1971).

While so many clamor about the interference of big government and their fight to protect individual rights and freedoms, the media had failed to inform the people, the public policy nonprofits and the legislatures under its obligation to protect the people in a democracy.  Today, the public is getting to see the first glimpses of the full story about the emergency and quiet acceptance of homeowner associations. 

More needs to be revealed.  There is no national security issue with HOAs.    

There is no law category or division for HOA law.  It’s part of Property Law.

A number of attorneys advertise that they are experts in HOA law — and are debt collectors, too — giving the false impression that only these self-appointed few are capable of handling HOA cases.  Many times they are brought to homeowner associations board meetings when members have a difference of view point with the board in an attempt to intimidate the outspoken homeowners.

Now, with factual evidence from OAH decisions regarding HOA complaints, all brought by homeowners, and most representing themselves as a Pro Per, the myth of the HOA expert has been pierced.  The results of some 24 decisions over the first year of OAH adjudication reveals that the HOA “expert” has been right just slightly more than 50%, and that’s against Pro Pers or non-HOA expert attorneys.  Homeowners who must deal with the “expert” at a board meeting should remind those in attendance that the pronouncements of the HOA attorney are indeed not reflecting 100 % correctness or finality, but just about 50% of “finality”.  That these attorneys are not HOA Gods, and can be challenged and defeated!

Practicing attorneys with litigation experience should not decline to take on homeowner complaints when told that there is a 50% chance of challenging these self-appointed attorneys and winning.

The unfounded fears of massed Office of Administrative Hearings, OAH,  complaints by disgruntled homeowners that resulted in the legislature imposing a $550 filing fee, raised to $2,000 5 months later and then lowered for a single case back to $550 in April, have been proven just  that —  completely unfounded.  The results after the first year “in business” reveals:

HOA cases:            38

decisions:                  32

Homeowners won:            10

HOAs won:                      14

split decisions:                     4

vacated decisions:               4

The homeowners won not 5% of the cases, as would be expected if the wild claims that “95% of the HOAs are good”, as alleged by HOA attorneys and lobbyists over the years were indeed true, but 42% of the cases. The first year statistics revealed that in most cases the homeowner was  a Pro Per facing an HOA attorney, and that ALL cases were filed by homeowners and not one by an HOA.  Bear in mind that the decisions are based on the adhesion contract nature of the HOA governing documents, the general lack of legal knowledge by the homeowner petitioner, and the HOA supportive state laws — all serving to create a “playing field” that is not level.

The miniscule HOA cases that were filed, in contrast to some  7,360 cases heard by OAH in 2006 (that’s a mere 1.7%), does not warrant the imposition of a $550 or $2,000 fee.  The legislature must remove this requirement that treats homeowners in HOAs as second class citizens. Research into OAH fees for agency filings shows that over 78% (top 4 agencies) paid no fee whatsoever.  

It is time for the legislature to recognized that they have been mislead over the years by the fear mongering lobbyists who seek to treat HOAS as independent principalities free from government oversight.  A review of the audiotapes of the OAH hearings provides a wealth of information regarding HOA attorney courtroom tactics against the Pro Pers, and the hostile and arrogant attitude of HOAs toward obeying state laws and the HOA governing documents.  The tapes are an invaluable aide for homeowners who want to understand the law, and for HOA boards interested in following the law, with the result of  a better understanding of life in an HOA..

 In spite of a few learning curves by homeowners and OAH, the ALJ adjudication of homeowner complaints has been a success. While the adoption of OAH was a milestone in due process reforms for HOAs, there are more reforms necessary to restore the rights and freedoms of homeowners living in HOAs as enjoyed by homeowners not living in HOAs.

 

I raise this issue once more as a result of an Arizona Administrative Law Judge’s recent holding that voting delegate systems are proxies, and are prohibited by the 2005 Arizona law prohibiting HOA proxies.  (See Voting Delegates). The law was adopted to curtail elections abuse by HOA boards that control the proxy process, from preparing and mailing proxies to vote counting.

The answer to this question requires an answer to another question:  What makes a government a democracy?  Just because member/citizens are allowed to vote does not qualify as the sole ingredient of a democracy.  Just look at Cuba, China and other totalitarian dictatorships.  What does, then?

Professor Robert H. Dahl (Political Science department, Yale University) asked the question, “How well does the constitutional system perform?” (How Democratic is the American Constitution?, Yale University Press, 2002) and offered the following criteria for his research:

To what extent does a constitution (HOA Declaration in our instance) help:

1. protect fundamental democratic rights;
2. maintain the democratic system;
3. ensure democratic fairness among citizens;
4. encourage the formation of democratic consensus; and
5. provide for effective problem-solving?

Applying these criteria to HOA governing documents, it is clearly evident that the corporate form of governance and the oppressive and unconscionable adhesion document, the Declaration, without any explicit statement of homeowner/member rights or the protection of fundamental constitutional rights, does not create nor foster a democratic community.

However, in an attempt to create the illusion of democracy, the Arizona HOA declaration in question set up a voting delegate system, created by Wayne Hyatt,  whereby members voted for delegates from their “political area” who were the only persons allowed to vote on HOA board matters and elections.  The CAI member firm and HOA attorney attempted to claim an unconstitutional interference by the administrative hearing, to which the judge responded,

Respondent [HOA] also argues that prohibiting delegate voting would be an unconstitutional impairment of the contractual rights of the Association and its Members. Setting aside the obvious fact that an association’s governing documents are hardly products of the typical give-and-take contract negotiation that ordinarily occurs between a buyer and seller, it is nevertheless difficult to argue that a ruling that expands a member’s right to participate in his association impairs the contractual rights of either the association or its members. The association is its members. The association and its members both possess the same rights and, presumably, the same interests. How could those rights and interests be compromised by requiring important association decisions to be based on a vote of all of its members?

It is important to keep in mind that the consideration of a complex issue, as is this question of a democratic institution, is not to look solely at one isolated aspect of the question, but to look at the total picture.  As exists in HOA governance, the HOA is the government of the subdivision and community. It fails the criteria set forth by Professor Dahl, and by any other reasonable definition of a democracy.  Yet, the CAI and the proponents keep proclaiming HOAs as democratic institutions reflecting the will of the local community.  And as demonstrated by this Arizona decision, will make every futile effort to protect the illusion of the HOA democracy.

An alphabetic index of all commentaries/eEditorials on HOAs, homeowner associations, fundamental and constitutional rights, legislation, UCIOA, and CAI can be found under  BLOGROLL  on the right-hand column of this page.   It will be updated periodically.