Category: Opinion

I could not believe what SB 1240 was amending.[1]  Shades of SB 1454 when in 2013 that bill was declared unconstitutional by the AZ attorney general in a settlement agreement.[2]  SB 1240 raises several questions:

1. An unconstitutional delegation of legislative authority and power to private entity HOAs to regulate public streets: if the “local government entity has granted that authority [to regulate] to the Association.”

a.  SB 1240 does not grant legislative authority to the local governmental entity to defer to the HOA association;

b.  does not contain specific wording with regarding the powers and functions delegated to the HOA — “to regulate” is too broad a delegation of power.

c.  And does not contain specific wording with regarding the powers and functions delegated to the HOA — “to regulate” is too broad a delegation of power.

2. Assuming (A) above is constitutional, the bill would make HOAs state actors, functioning for and in place of the “local governmental entity,” presumably the planning board. As such HOAs would be subject to the state and US constitutions as an arm of the state.

Lengthy presentations of constitutional law, state actors, and the delegation of legislative authority can be found in voluminous legal encyclopedias like American Jurisprudence (cited as Am. Jur. 2d) and Corpus Juris Secundum (CJS).  These constitutional questions can also be found in legal treatises (lengthy discussions) like in Constitutional Law (Norwalk and Rotunda, West Group) and in legal journals like Wm & Mary Bill of Rights Journal.

For my concerns here, I will make use of an Arizona case in which the CAI member law firm of Carpenter Hazelwood attempted to have OAH adjudication declared unconstitutional on several occasions.  The decision in Waugaman[4] served as the basis for the subsequent “rubber stamp” decision in Phoenix Townhouse and the supreme court decision in Gelb.^[4]

In Waugaman the court held,

An administrative agency may resolve disputes between private parties if this authority is auxiliary to and dependent upon the proper exercise of legitimate regulatory power.  In the context of disputes between homeowners and homeowners’ associations, there are no defined regulatory duties vested in the Department or any other executive branch agency.  Thus, the legislature’s delegation of authority to the Department violates the separation of powers doctrine.

This decision reflects the essential requirement for a constitutional delegation of power to an agency, and logically, to any delegation of regulatory power to any private entity like an HOA.  SB 1240 should be withdrawn to avoid another black mark for the Arizona Legislature.

SB 1240 is a prime example of why the federal government must get involved in holding state legislatures to tow the constitutionality line.[5]

 

References

[1] SB 1240,  https://apps.azleg.gov/BillStatus/GetDocumentPdf/446408.

[2] See AZ Attorney General admits SB 1454 HOA to be invalid and without effect.

[3] Troon Village v. Waugaman, LC2007-000598-001 DT, Maricopa Superior Court, Oct. 3, 2008.

[4] See the history presented in AZ OAH adjudication of HOA disputes held unconstitutional. The decision in Waugaman was ruled not binding by the AZ Supreme Court and it could not binding precedent as to other cases.  A few months later, the legislature revised the statutes to comply with the ruling and the constitutionality challenge became mute.

[5] See AZ legislature’s pro-HOA posture forces going to the Feds.

After my Commentary of Jan. 15th, CAI finally admits to being a business 501(c)6 trade organization, the demands/requirements of state Senator D. Farnsworth for sponsoring HOA reform legislation came to my attention.  This requirement was laid upon the Arizona Homeowners Coalition in its attempt to enact HOA reform legislation. In my experience of 17 years only a handful of HOA bills had over 3 sponsors.  Note that the 2 technical bills already submitted had less than 4 sponsors.

My reading of the D. Farnsworth requirement for 12 sponsors is simple.   There is no support in the legislature for HOA reform bills, and Farnsworth is seeking a decent group to back these bills.  It also reflects the attitude that Farnsworth is not a champion of HOA reforms, but is playing “nice guy” to make the legislature look good.

Gee, I gave them the opportunity to present worthy bills, but they failed to measure up. Not my fault. Perhaps they should work with the Great HOA Educator Experts, CAI, and learn something.

 I had hoped that some meaningful reform bills dealing with HOA operational concerns – not dealing with substantive constitutional issues (forget about it!) – would make it through the legislative process.  I doubt it now.

BUT WAIT there is an alternative. Understanding that “Those who cannot remember the past are condemned to repeat it,” (George Santayana), instead of repeated attempts to get state legislatures to “straighten up and fly right” there is an opportunity going to the FEDS. Here’s why, and should be deeply understood, as I explained in my letter to my Congressman:

I well understand that HOAs are creatures of state governments and subject to state and not federal laws. Unfortunately, is the long-term failures of state legislatures to uphold their constitutional, both federal and state, duties and obligations in the broad areas of due process and equal protection of the laws that necessitates federal involvement.  Only the federal government — and not a national lobbying organization nor a uniform laws commission that have been devoid of any homeowner representation —  can make the states stand by their constitutional obligations to protect the rights, freedoms, privileges and immunities of citizens of this country.[1]

Furthermore, I wrote,

In 2013 Professor McKenzie (UIC) sensed the need for Congress to act, writing in his Privatopia Papers blog[2],

Maybe the time has come for federal congressional hearings. Maybe we need national legislation mandating much more public disclosure, transparency, and accountability from developers, local governments, CIDs, and the professionals who profit from their proliferation. Maybe more.[3]

And,

The constitutional aspect of the CC&Rs centers around the lack of judicial scrutiny[4] with respect to the alleged surrender of constitutional and individual rights and freedoms (together as the equal protection of the law) . . . . Nor has the state advanced its justifiable interest in curtailing the rights of its citizens that will pass judicial scrutiny.[5]

In order to succeed you must accept the world as it is and rise above it. (anonymous).

The ball is, as always, in your court and your court alone.

References

[1] Excerpts from my 10-page letter to my Congressman and chair of the US House Constitution and Civil Justice subcommittee of the Judiciary Committee, sent in early January this year. My letter includes links to 14 advocacy group websites in 10 states across the country.

[2] “Las Vegas HOA corruption probe continues”, Evan McKenzie, The Privatopia Papers, Feb. 26, 2013”.

[3] Supra, note 1.

[4]< See Standards of Review for an explanation of the USSC requirements for a waiver and surrender of rights, including the government’s defense of that denial of rights.

[5] Supra, note 1.

CAI finally admits to being a business trade tax-exempt organization.

Community Associations Institute (CAI) is a national nonprofit 501(c)(6) organization founded in 1973 to foster competent, responsive community associations through research, training and education. […] We work to identify and meet the evolving needs of the professionals and volunteers who serve associations, by being a trusted forum for the collaborative exchange of knowledge and information, and by helping our members learn, achieve and excel.[1]

In my 17 years as a HOA reform activist this is a landmark first!  This is a personal achievement.  There was very little support from other reform advocates and homeowners regarding misrepresentation by CAI.[2]  As a result of my repeated criticisms and exposes, CAI had to apparently fess up.

Over its 44 years in existence CAI has mislead its viewers, members, the public and legislators as to its legal tax-exempt status. It news releases, websites, Common Ground magazine, communications with state and federal elected officials, and court filings that refer to representing homeowners and HOAs.[3] CAI is not allowed to have HOAs as members![4]  Example, CAI’s current web page reads,

CAI provides information, education and resources to the homeowner volunteers who govern communities and the professionals who support them. CAI members include association board members and other homeowner leaders, community managers, association management firms and other professionals who provide products and services to associations.

CAI serves community associations and homeowners . . ..^[5]

CAI cutely sidesteps this criticism using legal “word games,” parsing sentences and the meaning of words.  In my view, CAI will use the First Amendment right protecting the freedom to associate and so HOA directors are free to join the vendor trade organization.  However, by using their CAI vendors, lawyers and managers, to educate them as to what is good and right for their community and HOAs in general, directors are placing themselves in a conflict of interest violations.

CAI even to urges HOAs to support legislation harmful to the membership.  Please understand that CAI is legally protected by leaving the decision to become a CAI member up to the HOA board and individual director.

It is the director who holds the bag as to conflict of interest and loyalty violations of state laws and the governing documents.[6]  In whose best interest is he functioning? CAI’s view of authoritarian, un-American de facto governments, or the HOA members?  It is unconscionable and laughable that HOA boards would become CAI members!

The reason for doing so, in my experience, is a direct fault of the HOA legal scheme: Boards of directors are incompetent, grossly negligent, and do not wish to run the HOA or educate themselves, aside from being indoctrinated by CAI seminars. Some are competent and are not CAI members.   Others by far are rogue boards who freely get away with violating the laws and governing documents, because there are no civil monetary penalties to deter such illegal activities.

In short, CAI as a business trade organization is legally bound to promote the interests of its members, the lawyers and managers.   What is the business interest of a nonprofit HOA or its individual directors? The purpose of CAI as a business trade organization is not to support the consumers of its products and services, the HOA consumers.

References

[1] About Community Associations Institute (CAI).

^[2] Misrepresentation: CAI comes with unclean hands.  Contains multiple quotes by CAI HQ and state chapters evidencing this misrepresentation.

[3] See Complaint filed with NJ Supreme Court for CAI lack of “candor to the tribunal” as an example of a CAI court filing.

^[4] HOAS no longer accepted for CAI membership.

[5] About CAI (Jan. 14, 2017).

[6] Traitors and turncoats: HOA directors as CAI members

A group of Arizona homeowners/advocates have been meeting monthly since the summer with Senator D. Farnsworth to arrive at a set of HOA reform bills. As of this date, some 419 bills have been submitted that include only 2 reform bills, HB 2146 and SB 1060, both minor technical bills.

However, since only some 33% of the final bill total has been submitted, based on historical records, I would hope the more controversial bills would be submitted just prior to the deadline. The deadline is Jan. 30th.

The AZ group, known as the Arizona Homeowners Coalition, has proposed some 14 bills.  I hope they have better success with the more controversial bills of substance.

(See http://arizonahoa.blogspot.com/p/blog-page_6.html).

Is your legislature really interested in HOA reforms?  I think not.

What are the guidelines for moral and ethical behavior in HOA-Land and in America?

The following is a philosophical dialogue about the need for a god and its value to a society.  It occurs, surprisingly, in the History Channel Vikings series on Dec.   21, 2016.  King Eckberg of Wessex is based on a real person living in the early 800s in England.  Ragnar is the legendary Viking king who raided England.

Eckberg:    If gods don’t exist then everything has no meaning!

Ragnar:      Everything has meaning.  Why do you need your gods?

 Eckberg:   If there were no gods then anyone can do anything. Nothing would matter.  You can do as you like.  Nothing would have meaning or value.  If gods don’t exist it is still necessary to have them.

 Ragnar:      If they don’t exist we have to live with it.

In America today we are witnessing the truth of this elegant TV dialogue.  As I’ve written earlier, the US Supreme Court has killed God as a determinant of ethical and moral behavior.  If the teachings of God have no legal effect, then it follows that ethical and moral behavior, on the broad scale of a society, suffers.   Especially when no substitute guidelines were offered to fill in the gap.

Rather, political correctness entered the picture, which is an offshoot of  Ragnar’s philosophy, where there are shades of grey and the traditional meanings of words are blurred or lost altogether, ala Orwell’s Newspeak.  And to criticize another is ghastly behavior.  PC promotes the view that we all have rights and can assert them!

Does Ragnar’s view help explain the events occurring almost daily in shootings and killings, and asinine political decisions?

With society adopting the PC version of Ragnar’s view, it also helps to understand why substantive HOA reforms of a constitutional nature are ignored by our elected officials.  Echoing Eckberg’s argument: Without a god, anyone could do as they please.

Sadly, as Ragnar summed it up: If they don’t exist we have to live with it.  And we are!

Are you ready to Make America Great Again?

 

Happy Holidays!