Category: Opinion

East Valley Tribune, Letter to the Editor, Nov 8, 2004

SCOTTSDALE

The recent Tribune article on Arizona Great Communities still emphasizes property values over what really makes a community: the democratic and free exercise of the liberties and freedoms granted to all Americans.

In its criteria for the award, the Arizona Great Communities organization does have some worthy objectives: keeping reserves, informing members of who the officers and directors are and some “institutional” vendor educational requirements related to other board/founder affiliations.

These organizations focus on the status quo and teach current topics on management that have proven ineffective over the years, when used alone and without any courses in government, people relations, statutory obligations of homeowners associations, or an understanding of contract law for directors of HOAs.

These are sorely and desperately needed educational reforms yet to be seen after years of bringing these major deficiencies of HOA management to public awareness.

And why aren’t these topics covered? Because the special interests don’t want the public to know any serious problems with the loss of homeowners’ rights or the overwhelming powers granted to the board with little protections for the homeowners.

It’s time that these community oriented/HOA organizations deal with the reality before them.

GEORGE K. STAROPOLI

TO: PA Representatives

Lynn B. Herman, Chair, Local Government Committee

John Taylor, Chair, Chair, Urban Affairs Committee



HB 2461 Sponsor Schroder:



Bill Sponsors:

SCHRODER, ARMSTRONG, BARRAR, BENNINGHOFF, BOYD, CORRIGAN, CRAHALLA, DENLINGER, MANDERINO, O’NEILL, REICHLE, T. STEVENSON, E. Z. TAYLOR, THOMAS AND TIGUE



I would like to congratulate all the sponsors of this much needed bill to hold HOA boards accountable under the law, and to bring a measure of justice to homeowners. I wish you the best in these efforts and that the bill becomes law.



However, let me mention an important aspect of your bill that is easily recognized by homeowner rights advocates as creating obstacles to effective deterrence to violating the laws and at the same time “motivating” boards to comply with the laws. A 2/3 vote is too high a standard for justice and the amount of fines, $50, is nothing more than “lunch” money to the HOA.



What is needed is a punishment that fits the offense as compared to comparable offenses or punishments. A search of the PA statutes reveals that a higher misdemeanor penalty is appropriate, since they can call for fines of up to $10,000 (medical record keeping) for corporate violators of similar offenses.



PA examples of a misdemeanor:

§233.117 third degree – school official releasing confidential info

§249.54 second degree – false statements or falsifying records

§15.147 second degree, $2,500 fine — HEW official violation statutes

§317.4 third degree – state official disclosing confidential information§105.4 misdemeanor – violating Art. for by Public Assistance employee



Please keep in mind that violations by directors who owe a fiduciary duty to the homeowners should also be in keeping with the same per diem charges that many HOAs levy against homeowner offenders. I strongly suggest that this is the appropriate fine for HOA board offenders of the law.



What’s good for the goose is good for the gander.

George K. Staropoli

Citizens for Constitutional Local Government

Scottsdale, AZ

A US Supreme Court case, State Farm v. Campbell, 538 U.S. 408, on the topic of punitive damages has bearing on the Radcliff foreclosure in California, and on other HOA foreclosure cases. Here’s what the USSC said in 2003:

“Compensatory damages are intended to redress a plaintiff’s concrete loss, while punitive damages are aimed at the different purposes of deterrence and retribution. The Due Process Clause prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeaser … Punitive damages awards serve the same purpose as criminal penalties … However, because civil defendants are not accorded the protections afforded criminal defendants, punitive damages pose an acute danger of arbitrary deprivation of property …”



This was an insurance case, won by the inurance company, with a ratio of 145:1 in punitive damages that the Court denied. The foreclosure against the Radcliff’s was for $120 debt and the loss of home equity was some $285,000, representing over a 2,000:1 punishment.

A September 2004 Michigan Appeals Court decision addressed the validity of amending the CC&Rs with less that a unanimous vote. The Court held to the position that homeowners are bound to amendment changes that are passed in accordance with the CC&Rs amendment provisions — a less than 100% vote binds all others. Talk about lack of informed consent to such potentially wide-ranging impact on your home.



Citing another case, the Court considered the following as a possible consequence of allowing a less than unanimous vote:



“Taking these words to mean that particular lots could be excepted [say from paying assessments] permits the obviously unintended result that 51 per cent of the owners could exempt their own property and leave the other 49 per cent encumbered or could even impose more strict restrictions upon certain lots.”



Therefore, It went on to say,



“We conclude that the logic of the many courts cited [ ] is sound and should be followed here: Non-uniform covenant amendments require the unanimous consent of the affected property owners. Permitting non-uniform amendments and exemptions by majority or supermajority vote would destroy this crucial aspect of covenants and thus undermine the entire system of private regulation of real property in Michigan. The fundamental premise that makes people willing to bind themselves to the burdens of restrictive covenants is that the resulting benefits are assured; each property owner relies on the fact that all are bound equally ….”

Evan McKenzie joins in on clarifying the limitations on our rights and the how a private government can get around and use the US Constitution against unknowing Americans. Now, something seems wrong here, doesn’t it?



From Deborah Rich’s very good article in the SF Chronicle on Sept 25th.

“Homeowners associations, being private organizations, cannot violate the Constitution, no matter what they do. They can tell you to take down your Christmas decorations, your American flag, whatever,” says Evan McKenzie, political science professor at the University of Illinois, Chicago, lawyer and author of “Privatopia: Homeowner Associations and the Rise of Residential Private Government” (Yale University Press, 1995).

“Since it is not state action, the Constitution does not protect you against it. The Bill of Rights only protects us against the actions of government. We do not have a First Amendment right against other individuals. Cities can’t ban political signs, but your employer can.” And so can your association, unless states pass laws prohibiting such a restriction from being included in CC&Rs.



“We’re going to have a presidential election, and there’s going to be plenty of neighborhoods where there won’t be any signs,” says McKenzie.

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Other articles on the prohibition of political speech by HOAs were carried by The New York, Times, The Cincinnati Enquirer,The Daily Chronicle (IL), The Post & Courier (Charleston, SC), and the Beaufort Gazette.