Category: Opinion

I’ve written many times about the mass merchandising — the large-scale promotion and selling — of HOAs to the public. I’ve commented on the bible for this program, the Urban Land Institute’s Technical Bulletin #50, The Homes Association Handbook of 1964, funded by the special interests and your federal government. (See Part I in, Handbook).

It is clear that the creators of this housing model,

1) desired the mass acceptance of HOAs across the country,

2) realized that they must tie HOAs strongly to equitable servitudes with the favorable protections it offered the developer as the creator of the CC&Rs,

3) that constructive notice rather than a signed contract, was the strong mechanism to allow for the mass selling to average Americans,

4) that other forms or model of housing development — the business entity known as the housing cooperative where people buy shares in the co-op that owns the real estate — that relied on contract law would not protect the developers’ interests,

5) the obsession for uniformity and conformity to developer created “laws”, the covenants running with the land, in order to maintain their obsession as to what makes a beautiful landscape (Levittown with curved roads),

6) that an authoritarian regime, the business corporate form of governance, was necessary, with lip service to democracy, to maintain the developer’s plan for larg-scale acceptance of HOAs, and

7) that a different sales pitch was prepared for the different parties: carefree living and property value protection to buyers; profit protection for lenders and developers (forecosure and equitable servitudes); and affordable housing subdivisions at no-cost to the municipality.

A review of the complaints and problems with HOAs can be traced back to one or more items in the above statement. Ask yourself,

1. Why is there an obsession with one set of CC&RS and the acceptance of ex post facto laws, when the US Constitution prohibits them?

2. Why is there the need to foreclose on nonpayment of fines and assessments, if not to punish the homeowner and to preserve the HOA that has very little at risk? In this manner, they could mass sell “protection” to developers and lenders.

3. Why have the special interests, and the leading national lobbyist, CAI, strongly opposed recognition of HOAs as a government, and their insistence on HOAs as a business?

4. Why were no bill of rights included?

5. Why is there a focus on “community” rather than on “business”?

6. On equitable servitudes and not contract law?

7. Do I own, in reality, my home as my private property when my neighbors can control my rights without my approval?

8. Why are the courts still defining what my rights are under the CC&RS, long after I thought I had a “sealed” agreement?

Mass merchandising, like selling appliances, required a nonnegotiable acceptance of terms and conditions that are common in the world of commerce, but has no place when it comes to a person’s home and the surrender of civil and constitutional rights. With a person’s home, the CC&Rs must be viewed as an adhesion contract that is unconscionable and against public policy.

One of the first complaints, OAH # 07F-H067007-BFS (2007), heard before an administrative law judge in Arizona’s new experiment in bringing justice to HOA disputes involved a homeowner who filed a complaint about the taking of his sidewalk property of some 20 years – among other things. The HOA amended the CC&Rs and appropriated homeowner sidewalks since, it was argued by the HOA, the HOA was already maintaining them as required by the CC&Rs. There were no deeds signed by any homeowner, just an amendment deemed valid since it met all the requirements of the CC&R amendment procedure.

The decision failed to acknowledge that the homeowner at his hearing raised the question of the validity of portions of the lengthy amendment to the CC&Rs. The ALJ did not address the purpose and validity of the amendment in his decision, which stated that the homeowner failed to “present any substantive evidence” and that,

“[S]uch concerns [by Petitioner] are ultimately irrelevant to the determination of this matter, which involves not the substance of the amendments but the manner in which those amendments were adopted”.

See complete analysis at Sidewalk.

Should the business judgment rule (herein “BJR”) rather than the alternative, reasonableness test for decision-making be the standard for HOA board actions? The courts grant HOA boards broad rights over homeowners by currently holding that the board is the best decider of what’s good for the HOA, not the courts, regardless of any test of the reasonableness of actions. We believe that the rational for this position was reached by faulty analysis and a bias toward treating the HOA government as the best arbiter of “the stability of the common living arrangement.”

We believe this holding deprives homeowners of their due process rights, especially when board the decisions relate to rules and regulations regarding use of private property and the conduct of the homeowner.

Read more at Judgment.

CAI’s lament about “10 Things They Hate About You” (Jan-Feb 2007 Common Ground) in reference to the poor performance of HOA boards. This follows CAI’s 12 part, year-long effort on Skiba’s blog, “Pearls of Wisdom“. These communications are in direct conflict with CAI’s propaganda surveys on how happy homeowners are in HOAs.

What are these 10 complaints? Read and judge for yourself on the relevance of the complaints. Comments are in square brackets.

1. When you don’t share financial information. [Even when required by law].

2. When the rules are shrouded in mystery. [The rules are made up on-the-fly, without notice to homeowners].

3. “People are strange”. [Surprise, surprise that people within a community will differ. Board is incapable or unwilling to be responsive to homeowner concerns].

4. Inconsistent rule enforcement. [This reflects an uniformed board concerning its duties and obligations under the law and the governing documents, and the fact the board holds draconian measures to enforce compliance to whims – foreclosure].

5. Not allowing homeowners to vote on financial or other important matters. [In spite of CAI’s proclamations that HOAs are ideal direct democracies].

6. Meeting in secrecy [Public, democratic governments are subject to true blue sky requirements — open meetings].

7. Failing to appreciate professional management. [What professional management? Listen to the complaints and management is often the culprit guiding the volunteer boards].

8. Don’t seek professional advice. [True, but sometimes attorneys, the only professionals involved in HOAs, forget their neutral role and act in collusion with the board’s wrongful actions].

9. “Tight fisted”. [Is this number 9?].

10. Running for the board with an axe to grind. [Well, if the director was not conscripted into service, they all have an axe to grind, even those who seek to reform the board that isn’t doing what they think it should be doing.]

It’s about time that the industry special interests admit that the 40 plus year experiment in planned communities and homeowners associations is a dismal failure. How can a money-driven constitution, without a bill of rights, written by a commercial enterprise that leaves the community in a very short time, outperform the 220 year-old US Constitution?

CAI’s lament about “10 Things They Hate About You” (Jan-Feb 2007 Common Ground) in reference to the poor performance of HOA boards. This follows CAI’s 12 part, year-long effort on Skiba’s blog, “Pearls of Wisdom“. These communications are in direct conflict with CAI’s propaganda surveys on how happy homeowners are in HOAs.

What are these 10 complaints? Read and judge for yourself on the relevance of the complaints. Comments are in square brackets.

1. When you don’t share financial information. [Even when required by law].

2. When the rules are shrouded in mystery. [The rules are made up on-the-fly, without notice to homeowners].

3. “People are strange”. [Surprise, surprise that people within a community will differ. Board is incapable or unwilling to be responsive to homeowner concerns].

4. Inconsistent rule enforcement. [This reflects an uniformed board concerning its duties and obligations under the law and the governing documents, and the fact the board holds draconian measures to enforce compliance to whims – foreclosure].

5. Not allowing homeowners to vote on financial or other important matters. [In spite of CAI’s proclamations that HOAs are ideal direct democracies].

6. Meeting in secrecy [Public, democratic governments are subject to true blue sky requirements — open meetings].

7. Failing to appreciate professional management. [What professional management? Listen to the complaints and management is often the culprit guiding the volunteer boards].

8. Don’t seek professional advice. [True, but sometimes attorneys, the only professionals involved in HOAs, forget their neutral role and act in collusion with the board’s wrongful actions].

9. “Tight fisted”. [Is this number 9?].

10. Running for the board with an axe to grind. [Well, if the director was not conscripted into service, they all have an axe to grind, even those who seek to reform the board that isn’t doing what they think it should be doing.]

It’s about time that the industry special interests admit that the 40 plus year experiment in planned communities and homeowners associations is a dismal failure. How can a money-driven constitution, without a bill of rights, written by a commercial enterprise that leaves the community in a very short time, outperform the 220 year-old US Constitution?