Category: Opinion

In my HOA Common Sense: rejecting private government pamphlet, No. 5, Democratic Elections, I argue that the adhesion contract CC&Rs presents defective and unfair election procedures, if any.  Last month Frank Askin, hero of the Twin Rivers (NJ) free speech case and Director of the Rutgers Constitutional Rights Clinic, wrote the chair of the California Assembly Housing Committee opposing the proposed election requirements in AB 1799.  (Thanks to the California advocacy group, CCHAL, for posting the letter).

His legal-eagle eye uncovered a provision that allowed the HOA board to easily undo all and any of the proposed election requirements that favored fair and just elections.  AB 1799 gave the HOA the power to declare elections as uncontested, setting forth adherence to Sec. 5105 and giving the appearance of member protections.  But, section 5105 (a)(8) was added that based voting rights on “members in good standing.”   Section 5105(a) begins with, “An association shall adopt rules . . . ” and subsection (8) is one rule.  “Shall” is a mandatory requirement.

Nothing in the Legislative Counsel statement at the head of the bill made mention of a new restriction dealing with members in good standing.  (This summary is used as a ‘quick read’ by legislators and rules are strict about proper and adequate notice of changes.)

According to the  CAI stalwart firm of  Adams-Stirling (Davis-Stirling.com), ‘good standing’ is not defined in the Davis-Stirling Act, but generally means “a member who is current in the payment of their assessments and not in violation of the governing documents”  (emphasis added).

So, here we go again.  What you see is what you don’t get!  The board can declare any election uncontested by finding  members to be in violation and preventing them voting or being a candidate.  (Politicians are good in giving the appearance of propriety and fairness).

It is very important for all concerned homeowners to note  how state laws mimic and duplicate these private CC&Rs and legitimize them – now, it’s the law!  Ask yourself, why aren’t the CC&Rs document subject to state approval with mandated restrictions and conditions as found in the Constitution and Bill of Rights?  Why not, indeed!

For those who took the time to read all four of these white papers[1] — that I collectively interpret as the CAI Manifesto — what should stand out is the absence of any discussion of HOAs as de facto private governments, as de facto political entities, or as quasi or mini governments both of which imply a political entity.  The reason why the authors of these papers, the elitist would be Philosopher Kings, cannot address the question of violations of the Constitution is that they would be “Defending the Indefensible.”

So, as expected of politically motivated actors, ignoring the controversy makes it go away, especially when there’s only one voice of any merit and strength.  Facts that are inconsistent with the views of CAI are dogmatically dismissed and ignored. And to this end CAI has been very successful with respect to state legislatures and the cooperating media.

“For more than 40 years, CAI has educated, advocated, published and informed people living and working in common-interest communities. Thanks to those ongoing efforts, we have a strong and valuable understanding of community associations today.”[2]

CAI will use these papers to further indoctrinate the legislators, the media and the public that CAI is the only competent, informed, knowledgeable, educational and credentialed organization with 40 years’ experience to conduct HOA affairs and to deal with HOA issues.  “Homeowner rights advocates” are ignored and dismissed as an opposition movement.  Instead, following the lead of Arizona Rep. Ugenti who in 2013 made the following statement to the Arizona Government Committee:

Ugenti stated that each year there was “a plethora of personal HOA legislation” and tried “to spare the [committee] members the constant agony of many personal pieces of HOA legislation,” as contrasted to the industry legislation. (See video of Ugenti speech here https://youtu.be/REt_TJD-6UQ).

CAI speaks only of “individual constituents” and “isolated incidents” that do not measure up to a policy that the legislature could act on[3] (my emphasis):

 Lawmakers have been, and will continue to be, called upon to address concerns expressed by individual constituents who share an isolated incident that has made them unhappy with their community associations. In an effort to help constituents, lawmakers may introduce legislation addressing association governance that may increase and undermine the well-established and proven model of community association governance.

This trend is expected to continue as long as a legislative response is considered necessary to respond to negative perceptions produced by media out of lone circumstances. Legislative responses to individual constituents contribute to community associations being perceived as over-restrictive micro-governments focused on covenant enforcement. This perception may accelerate legislative efforts aimed at greater oversight of community association governance and require greater transparency.

They make an accurate assessment of conditions. This failure to present a unified national voice backed by credentialed authorities will continue to persist into the future.  If you stop CAI Central, you destroy all local CAI state chapters’ reason for being. They become just another self-serving special interest.

These papers also contain CAI attempts to influence other dominant organizations like AARP and NAR (National Assoc. of Realtors).[4]  Furthermore, CAI calls for not only influencing legislatures, but the judges, too.[5]

 In May 2006 I wrote (see p. 20, Conclusions, in Nationwide Lobbyist for Principalities):

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.

References

[1] Links to these papers can be found on the CAI web page, Community Next: 2020 and Beyond (May 5, 2016).  “A manifesto is a public declaration of intentions, opinions, objectives, or motives, as one issued by a government, sovereign, or organization.”  “A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing body’s philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.”

[2] Id

[3] Supra, public policy link, p. 6.

[4] Supra. n. 1, external influences link, p. 4-5.

[5] Id, p. 13-14.

In Phillips v. Snyder[i] the federal district court in Michigan repeatedly stated that,

 “The Supreme Court has had multiple opportunities to find a fundamental right to vote, and has passed each time. There are plenty of compelling arguments that the right to vote should be a fundamental right, but it is not this court’s place to extend the law. . . . The Act [Michigan PA 436 that was being challenged] does not take away a fundamental right to vote, because such a right has never been recognized by the courts.”[ii]

 WOW!  And we proudly declare that America is the model of democracy!  Wow!

This case involved a Michigan law that stripped elected officials of their legitimate powers and invested complete control of Detroit in the hands of a Governor appointed “Emergency Manager.”  Detroit being in bankruptcy, the State acted under a government general interest in the welfare of the people.

 In other words, the Act was subject to a loose “rational basis” for validity rather that the strict basis that requires a necessary and compelling reason for the law.  Strict scrutiny is for violations of fundamental rights and the Court held that the right to vote was not a fundamental right.  The strict scrutiny criteria did not allow a law to “burden a fundamental right.”

 The Court held that the Act did not remove the people’s right to vote and they could still vote for elected officials, ignoring the fact that these officials had no power whatsoever. “The Constitution does not compel a particular method of choosing state or local officers or representatives.”  The law did not violate the Guarantee Clause, according to the court, that all states be a republican form of government.

Therefore, the Act granting powers to the Emergency Manger did not violate the Constitution.  Its rationale was, “Since local governments are considered ‘convenient agencies’ whose powers depend on the discretion of the state, maintenance of republican form at the state level is sufficient to satisfy the Guarantee Clause.” So what if the subdivision of the state, the City of Detroit, was not republican.

 And there were other similarly decided positions by the Court that I omit here.

 As Evan McKenzie so well stated in his Privatopia Blog, “As for HOAs, if the state can take away your power to choose the city council and the mayor, making constitutional rights arguments about HOA elections would seem like a lost cause. So this case is significant.”[iii]

I am concerned that if a state can do as it pleases with respect to local governments, it can do even more than we now encounter with HOA private governments. The district court’s logic, if upheld, casts a dangerous shadow over what can come next in HOA-Land.

References

[i] Phillips v. Snyder, No. 2:13-CV-11370 (E.D. Mich.2014). (On appeal in the 6^th Cir. Plaintiff’s brief).

[ii] The argument here centered around the constitutional  equal protection of the law clause, and only voting that was not equal for all the people was unconstitutional.

[iii] Evan McKenzie,  “Michigan Lawsuit Shows U.S. Voters May Not Technically Have the Right to Elect Their Mayors – CityLab”

 

 

 

In my commentary, Landmark HOA legislation restores homeowner property rights, I indicated that Arizona’s HB 2382 was on the verge of being sent to the Governor.  The bill would restore “ex post facto” HOA amendment rights for homeowners that would, indeed, make the CC&Rs “contract” a more binding contract.  It would not allow amendments that harmed owners affected by the amendment unless they consented to the bill. It is a limited bill, but contains substantive HOA reforms.

That was back on March 28th. Today, the bill has been held in “limbo” for a month by the Speaker, David Gowan, whose powers allow the Speaker to control when and if a bill gets to a final vote. Approval in this final vote would have sent the bill to the Governor for signing. As the legislative session is in its last days, pending budget approval, this bill looks dead by “the establishment.”

This state of affairs came about as a result of a trivial amendment in the Senate by Sen. Kavanagh, a CAI stalwart, making technical changes. As a result, instead of the bill being sent to the Governor, it must go back to the House for approval.  House approval was recommended and the bill should have been placed on the Final Vote agenda within a week, as typical.

Arizonians! Your support is necessary to move the bill!  Email Speaker Gowan (dgowan@azleg.gov)  and sponsor, Eddie Farnsworth (efarnsworth@azleg.gov), urging the Speaker to allow the voice of the people, the legislators, to vote on the bill and stop “the Establishment” control of legislation.

HB 1720 seeks to correct the deficiencies in existing law in a very limited manner.  All it allows — read the bill carefully and compare it to the misinformation and fear mongering by CAI – is for the attendance of any attorney at a board meeting.  It does not make any changes with respect to participating in discussions or voting as CAI asserts would happen.  The HOA still controls all other aspects of attendance at board meetings.

CAI’s Call To Action urges opposition to the bill.

“In sum, AB 1720 is an unwarranted disruption to proper and orderly board discussions, causes unnecessary expenditures to associations, and will intimidate volunteer board members”. CALL TO ACTION: NO on AB 1720 Attorneys at Board Meetings  (April 15, 2016).

In its Blog, an active CAI attorney wrote, “While some may think this is a “common sense approach” to allowing members to protect their rights, it ignores the reality of how associations operate.”  Attorneys for Association Members at Every Board Meeting?  In his blog, CAI stalwart attorney Swedelson posted several calls to oppose HB 1720. “Let me conclude by saying that I believe that AB 1720 will cause an unwarranted interference to proper and orderly board discussions.”  Oppose California Assembly Bill 1720 (April 13, 2106).

Why is CAI so worried?  Let’s ignore CIA’s hype, half-truths, and fear mongering statements and deal with the issues.

HB 1720, in the short subsection (c) amendment to Civil Code 4925, simply reads:

The board shall permit an attorney who represents a member to attend any board meeting that the member is permitted to attend, regardless of whether the member attends. Where possible, the member shall give the board at least 48 hours advance written notice that his or her attorney will attend the board meeting. 

What is the problem with allowing a member’s attorney from attending a meeting that the member could attend?  It is accepted practice to allow for proxy voting whereby a member is not present and another appointed person votes in place of the non-attending member.  What’s the problem?  There is none if the board is acting in good faith, and has nothing to hide, which CAI seems to have implicitly acknowledged in its opposition to the bill.  “ignores the reality of how boards operate,” and “disruption to proper and orderly discussion.”

We know how boards operate, and it ain’t like what is written in the laws or governing documents, where the common defense by the board is, “this is what our attorney told us” without any written evidence or confirmation from the attorney.

Swedelson did a good job by reminding his readers that the laws are pro-HOA and that the CC&Rs are adhesion contracts, both which lack true opposing party, the homeowner party to the CC&Rs and the absence of homeowners in the stakeholder sponsored HOA bills.  He points out, quoting from SB Liberty v. Isla Verde (2013),  that 1) the CC&Rs only allow members to participate or attend, and are silent on “or his representative,” 2) attorneys cannot attend, 3) the board decides who may attend meetings, 3) and that the California statutes basically state the same restrictions as the governing documents.

Now any rational, objective person does not need any argument as to the lack of fair treatment and the injustice fostered upon the owner by “the law,” deriving him of his private property rights. These property rights would be protected under the Bill of Rights if the HOA were treated as a public entity.

What the bill would do, as I’ve pointed out elsewhere, is to allow the non-lawyer member to have an advisor present to hear and see, and have his client raise his questions.  What’s wrong with that?   If this is a serious problem for CAI and the board, then it is definitely a serious problem for the members.  

Based on CAI’s strong opposition, they fear being held accountable to questioning by competent attorneys.