Category: Opinion

I’ve often wondered why so many are turning to arbitration as a means of settling HOA disputes, and to avoid court costs. The persons in the know say arbitration is generally cheaper, but an arbitrator can cost $1,000 -$4,000 per day, plus an initial filing fee around $750 with additional administrative costs.

Arbitration relies on one very important factor as applied to rogue HOA boards: both parties must be open to working together for a resolution to the problem. That’s a contradiction from the start: “rogue” and “working together.”

If minimal costs are acceptable and you have a truly workable Board, then this is a possibility. However, understand that there are conditions that can leave you without recourse to an appeal, not only to the decision but to the costs being charged.

As for those outlandish court costs in the tens of thousands or more, it goes without saying you are dealing with a hostile Board and arbitration will get you nowhere.  In the arbitration process, your HOA can still hire attorneys to represent them, and guess who pays for them? Not according to the arbitration process, but because of your CC&Rs make it clear that your HOA costs are paid by homeowner.

Find out more about how to make arbitration work for you. Read articles in the Notes 1 and 2 below.

Notes

[1] “Arbitration Pros and Cons”, Nolo.com.

[1] How much does arbitration cost, and who pays?, Legal Nature.

Good question from Deborah Goonan! In her article, Will AARP help rein in HOA abuse?, she examines in detail the views put forth by yours truly and others as to what has AARP really done to stop these private governments operating outside the Constitution.

Her excellent article presents activities by AARP in support of homeowners, such as support of requiring HOAs to accept partial assessment payments as to forestall foreclosure – 2013 amicus brief. She also presents harmless, ineffective articles “ tell me,” a foreclosure instance, and “boomers” like their HOA more than X-Geners.

All nice articles, like those we see in the news media, but none calling for action by the Feds to address the serious issues as contained in its 2006 Member Rights paper, or by my HOA Common Sense: rejecting private government summary of 6 HOA abuses of substance and of constitutional concern.

Deborah then examines two areas of AARP involvement, “What is AARP’s role in housing reform?” and “Where does AARP stand on housing policy?”  She concludes with,

There’s no reason older Americans cannot have all the benefits of safe living environments and diverse housing choice, without promoting — almost exclusively — common ownership and privatization of local government.

AARP is a tremendous national powerhouse lobbyist representing, as reported in the 2014 WSJ article, some 37.8 million members. That’s a staggering number that is 100 times greater than CAI’s meager membership of 33,000 +/-. (Of which, it is estimated, that homeowners represent about 60% of the total membership).

Yet, it seems that CAI is the power house when it comes to HOA issues both at the federal and state levels. And AARP plays second fiddle.

The Jan-Feb AARP Bulletin contains an article on HOAs.  It’s about time!  Understand that in 2006 AARP produced a public paper, the homeowners’ bill of rights document, co-authored by Texas attorney and homeowner advocate, David Kahne.[1]

It died! How come you ask?  Perhaps it has to do with CAI’s Manifesto[2] in which CAI stated its position,

These papers also contain CAI attempts to influence other dominant organizations like AARP and NAR (National Assoc. of Realtors).  Furthermore, CAI calls for not only influencing legislatures, but the judges, too.

Not a further word over the past 13 years until this article, available only to registered subscribers.  So much for “working for you,” and “fighting for you” as stated in its “Government Advocacy” web page. Not a word about the plight of seniors in HOA-Land and the abuse they suffer until this important “wake-up” article by Joe Eaton.

The Bulletin article, on page 8 under “Home Wars” (not yet available on AARP’s web site), calls attention to the plight of seniors who face harsh treatment when they fall behind in making HOA payments.  An excellent article hitting home on one of my 6 substantial issues of HOA unconstitutionality — draconian foreclosure[3] and the influence of attorneys.  Foreclosure is a punishment!  It is common that more than 50% of the foreclosure money goes into hands of the attorney and not the HOA.

The nerve, the audacity, of CAI spokesperson, SVP Dawn Bauman,[4] saying that “this type of problem is rare.”  WOW!  This is important to understanding CAI’s objectives and beliefs, so bear with me.   Because its rare, is she saying that these people don’t need laws to protect them? Like, since only less than 5% of the population kill people we don’t need laws against killing people? That’s what it sounds like to me!  That these people are simply casualties of providing a greater benefit?   To whom? The Constitution? Or to the survival of the HOA scheme?

What are you saying Ms. Baum?  Given your statement, and numerous other CAI statements, how can CAI say with a straight face that it represents the homeowners and their constitutional rights?

I just wrote in my prior post,

“These statements [by CAI] can only be viewed as intentional falsehoods designed to disguise the real motives and objectives of CAI as I presented in note 2 of the Notes below.  Or, they are an example that the CAI “elites” – the Trustees and officers in CAI HQ and in state chapters — are completely unaware of the facts that it has overwhelmingly influenced and drafted pro-HOA state laws.”[5]

But, Michael Greenwald, a Boca Raton, FL attorney, called it like it is regarding attorney fees, “[Attorneys] typically charge no money to the HOA, but pass on legal fees to the homeowner. That’s an incentive for the firm [HOA] to escalate charges.”

Phoenix attorney, Jonathan Dessaules, a stalwart attorney defending homeowners from abuse, with whom I’ve worked with in the past, is quoted regarding foreclosures on seniors being hardest hit, “Many are on fixed income. They can’t afford the attorney fees that keep going up and up.”

These seniors are easy targets for the attorneys.

And where is AARP? Why isn’t AARP protecting seniors as they proclaim, “working for you,” and “fighting for you.”  But apparently it seems they have succumbed to the influence of CAI over the years.  It’s time for AARP to stand up and fight for seniors, and all homeowners, in HOAs!  AARP is a national power house that can stand before Congress and demand legislation to stop the abuse, to the stop these outlaw private governments and hold them accountable under the Constitution as required of all bona fide local governments.

What say you AARP?

 

References

[1] See AARP HOA Bill of Rights (and the paper itself at Homeowners’ Bill of Rights).

[2] See CAI manifesto: CAI’s plan for HOA-Land in America.

[3] See Draconian punishment and intimidation, No. 8.

[4] Dawn Baum is on the staff of the Foundation for Community Association Research.

[5] CAI spreads its influence at the federal level — beware!

CAI published its national legislative priorities release[1] reflecting its concern for federal issues that may affect HOAs, although it recognizes HOAs as being primarily under state laws.  I wonder if CAI is reacting to advocates’ posts regarding the need to alert the Feds about CAI and HOA abuse?

In May 2016 I wrote, quoting my 2006 paper,

In short, CAI has been setting itself up as the national private authority, a sort of Board of National HOA Governors, on local community governance through the adoption of uniform planned community acts that perpetuate the current anti-American HOA governments. In effect, the super, privatized agency to replace the US Constitutional system of government.[2]

Item 4 of its priorities deals with “Community Values.”  It goes without saying that CAI opposes federal intervention into HOAs. HOA-Land belongs to CAI!  “CAI opposes federal legislative or administrative actions that pre-empt lawful association board authorities.”  It is a mockery of the truth and reality when it asserts that “CAI strongly supports self-determination of community . . . who exercise authority . . . pursuant to state law and their community’s covenants.” 

These statements can only be viewed as intentional falsehoods designed to disguise the real motives and objectives of CAI as I presented in note 2 of the Notes below.  Or, they are an example that the CAI “elites” – the Trustees and officers in CAI HQ and in state chapters — are completely unaware of the facts that it has overwhelmingly influenced and drafted pro-HOA state laws.

How about the question of a bona fide contract, according to Contract Law 101, that requires full disclosure and a bargaining, a give and take, not present in the adhesion CC&Rs.  In “Consent to be governed,”

But, the courts do not question the validity of the CC&RS contract with respect to contract law.  The courts resort to equitable servitudes law, which simply requires the acceptance of a deed in order to bind the home buyer to the CC&Rs sight unseen.[3]

Have you been alerted to this very important disclosure of material fact?  Hell no!  And guess who engineered this legal structure, going all the way back to the 1964 The Homes Association Handbook.[4]

Don’t let CAI get away as the only voice for HOAs and their homeowners!!!

 

Notes

[1] 2019 Federal Legislative Priorities.

[2] See my 2016 post, CAI manifesto: CAI’s plan for HOA-Land in America; my 2006 paper p.20, Conclusions, Nationwide Lobbyist for Principalities.

[3] HOA Common Sense, No. 4: Consent to be governed.

[4] Analysis of The Homes Association Handbook.

 

The Indiana appellate court in McAdams v. Foxcliff  Estates[1] is another sad decision against plaintiff homeowners. The Court relied on the generally accepted public policy view that HOAs are good for America.  And any problems are totally the homowner’s fault.  Ignoring other questionable views by the Court, I will focus on the “inconspicuous nature” placement  of these clauses in the CC&Rs.

As a background, the question in the case was the use of an “exculpatory clause” placed in an alleged inconspicuous location in the CC&Rs.   Such a clause holds the HOA and its agents harmless from any wrongdoing – the HOA can do no wrong. In general, exculpatory clauses have been found to be against public policy:  it invalidates the agreement by making the agreement a one-sided agreement.

It’s hard to believe that the Indiana courts accept exculpatory clauses on the basis that “the contracts represent the freely bargained agreement of the parties.”  Unless the “the parties have unequal bargaining power, [or] the contract is unconscionable.”  And in further hard belief,  the Court argued that CC&Rs “are sensible to a person not under any delusion or distress”, and “one that [an] honest and fair person would accept.”

In regard to “inconspicuous nature,” which addresses the placement of very important and meaningful covenants favoring the homeowner.  They are placed in CC&Rs covenants where a knowledgeable person would not expect to find such words.  In other words, an effort by the HOA attorneys writing the CC&Rs to make these covenants almost hidden and secret from the homeowner.

The Court rationalized that inconspicuous nature did not apply to a knowing and willing contract, but relative bargaining power prevailed.  (You just can’t win against the Court’s rational in defense of the HOA.)

He court concluded, arguing the that there is no public policy to prevent HOAs from agreeing not to sue the HOA:

there is no public policy impediment to the parties agreeing that the not-for profit HOA, a volunteer entity comprised of other Foxcliff Estates residents, cannot be sued for damages ‘for failure either to abide by, enforce or carry out any of the Restrictions.’

For more information see Deborah Goonan’s post[2]

Reference:

[1] McAdams v. Foxcliff Estates,  No. 55A04-1707-PL-1707 (Ind. App. ), 2018.

[2] HOA Issue #5: Is your HOA legally obligated to maintain the common areas?