why shouldn’t HOA directors be held for criminal activities if the shoe fits?

The latest AZ-CAI chapter’s Call to Action, Apr. 5, 2012, objects to the AZ bill, HB 2160, that would make violations of the HOA elections procedure a Class 1 Misdemeanor. No reason s offered as to why not. The bill clearly states that only if the violation is an intentional violation, which is only fair considering the importance of fair and just elections in a democratic society. And aren’t we told by CAI that HOAs are the model of democracy?

Again, CAI resorts to scare tactics by focusing on the penalties under a class 1 misdemeanor. And that the fines, that can be as high as $20,000 for the HOA corporation, would be passed on to the homeowners. What an excellent approach to get member involvement, don’t you think, CAI? BTW, the Call does point out that the bill is to stop “electioneering,” you know, to stop the political machine interference so the people can “throw the bums out.”

The “we are poor volunteers” doing community good argument appears, but the presumption is that they are indeed doing good by opposing elections reforms. It ignores the fact that the bill addresses intentional acts by the political machine running the HOA for its own personal agenda. And the “death of the HOA” argument if we hold directors accountable for their acts is there, too. Well, should we support corrupt and incompetent entities used by a few for their personal agendas, entities that can ruin a member through fines and cruel foreclosure?

Finally, in an admission that not all actions by directors are covered by insurance — surprise, surprise – the fear of no insurance coverage is used. You know, it is not the acts of the directors themselves that is the precipitating cause of such refusals by insurers. No, not the directors, us poor volunteers.

I can hear those directors saying, “Damn! And we had it so good not being held accountable. Gee, I don’t think HOA life is such a good idea now that the “free ride” is over.”

I am well aware of the frequently used techniques that amount to legalized extortion by the HOA or its agent, the management firm. The 2 common instances are forcing the member to talk to the HOA attorney, and to sue on unsubstantiated and frivolous allegations. In the first instance, the member who is given notice of unpaid assessments but does not receive a detailed accounting of the alleged debt. So he rightfully asks the HOA for a statement of his account, not provided by the attorney, but is told to talk to the attorney. Why?

If the manager of president is not sure, he should contact the attorney on his dime and not the member’s dime – attorneys costs are charged back to the member. This is a legitimate request for corporate records and not attorney-privilege concern. And the HOA attorney knows this.

The second instance is the notice of a violation by the  attorney on HOA statements that would fail “reasonable cause” tests.  These allegations are acted upon without any attempt to “check out” the HOA charges, as it must necessarily be concluded, violating R. Civ. P. 11(a), “that to the best of the [attorney’s] knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law.”

The attorneys know that in the vast majority of these cases the homeowner will not go to court and either pay, if he can, or take the default judgment by the court. One JP Court judge told a homeowner in such a case that, “Normally, these type of HOA cases are default decisions . . . “ I would say that that amounts to legalized extortion with the attorney cooperating and looking the other way. See Code of Professional Conduct below).

(Sadly, Arizona bills with meaningful penalties against the HOA failed: SB 1240 would have awarded triple damages against HOA for selective enforcement actions; HB 2455, would have held the directors directly personably liable for member attorney fees; and HB 2731, would have held directors personally liable for lawsuits not made in good faith. They will be back next year, and the year after until put into law.)

HB 2160, elections reforms with meaningful penalties, gives the member a solid footing to take away control of the HOA by political machines and rogue boards. It awaits final votes.

Rules of the Arizona Supreme Court, Part V, Regulation of the Practice of Law, D, Lawyer Obligations, Rule 42.

1.2 (d) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent

1.13 (b) If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action, intends to act or refuses to act . . . that is a violation of a legal obligation to the organization, or a violation of law . . . .

NEW HOA DOCUMENTARY FILM, THE HOAX

On behalf of Rodney,

Hi there, I’m Rodney Gray. I am a former U.S. Marine, an actor and a filmmaker, who is currently directing and producing a feature documentary on the homeowners’ association (HOA) industry for submission to film festivals and future distribution, but also as my MFA production thesis at the University of North Texas.

My new film, The HOAX, follows an investigative reporter, homeowners, and HOA reform activists as they reveal shocking evidence of financial and psychological hardships experienced by people throughout Texas and Nevada. A few of these people, including the filmmaker, have been the subject of adverse actions from the very HOAs created to help them.

Please feel free to visit our websites to find out more information, get updates and watch the teaser trailer.

  The HOAX Movie Website:  http://thehoaxfilm.com/

The HOAX Trailer Tease and Campaign Website: www.indiegogo.com/thehoaxfilm

 

Spread the word and please share these links. Help us bring injustices into the light.

 

Best to you all,

Rodney

 

 

The public policy of the states with respect to HOAs

In order to understand what this Commentary is addressing, here is a general definition of “public policy.” First, “public interest” refers to the “common well-being” or “general welfare.” “Public policy” is generally defined as,

A principle that no person or government official can legally perform an act that tends to injure the public.

Public policy manifests the common sense and common conscience of the citizens as a whole that extends throughout the state and is applied to matters of public health, safety, and welfare. It is general, well-settled public opinion relating to the duties of citizens to their fellow citizens. Public policy enters into, and influences, the enactment, execution, and interpretation of legislation.

Yet, with respect to HOAs we find that, over the years and in almost every state, the acts and actions, the absence of acts and actions, and the statements and communications by state legislators, government officials and court decisions have created a pro-HOA public policy. I summarized this policy as,

The Public Policy of the states with respect to Homeowners Associations.

1. To protect and defend the HOA;

2. That “you are on your own,” and not inform those now living in HOAs, or about to buy into an HOA, that they will not be protected by the state against HOA wrongs and that HOA violations will go unpunished;

3. To allow HOAs to violate contractual provisions and state laws, as such lawlessness does not constitute an issue of public interest warranting state involvement and protection;

4. To ensure the survival of the HOA, even if it requires the denial of rights and freedoms enjoyed by those not living in HOAs;

5. To protect and defend HOAs as if they were necessary for the security of the state, warranting the suspension of constitutional protections.

AZ HB 2030 – slippery slope to Sanford police dept.?

The failures and continued actions of the Sanford, FL police department, with respect to the failure to uphold the laws on arrest in the Trayvon slaying, is disturbing. It reeks of a total disregard for justice and fair play. It causes me to consider what if your neighborhood HOA had these powers? The public policy with respect to HOAs has been a hands-off policy with and no accountability under the law – let them do as they please. Just as it seems the Sanford police department has adopted with its failure to arrest Zimmerman.

And yet, the Arizona Legislature sees no serious issue with the unrestricted delegation of regulatory powers to HOAs over parking on public streets as set forth in HB 2030.

“An association may regulate the parking of noncommercial vehicles on any roadway for which the ownership has been dedicated to or is otherwise held by a governmental entity . . . .”

My suggested amendment was ignored, “may regulate the parking . . . only with respect to parking by the members of the HOA who have waived their right to public parking on public streets within the HOA governed subdivision.” And the legislature rejected the position that the HOA can get a variance if it has legitimate parking concerns, like everybody else! The legislative intent to allow further unrestricted powers to these independent HOAs has become much clearer.

Would this bill put us on the slippery slope path that can produce an event like the Trayvon slaying? In Arizona, you can carry concealed weapons almost anywhere. The bill does not create any new laws, but is simply a re-affirmation for all to know of who runs local government. If this bill becomes law, then I believe we are on the slippery slope to the “law and order” of the wild, wild west by the power factions, like the cattle barons, railroad, and mining interests of the Old West. Arizona already had one incident where two HOA board members were killed in 2000 during a board meeting.

Although the bill is only about parking at this point, the real import of this bill is the starting out on the slippery pathway to further lawlwssness by HOAs. Where does it say that the the uniformed and arm-banded “HOA Security,” the police arm of the HOA, cannot stop and detain – that means ‘arrest’ — people on public streets? And Maricopa County Sheriff Joe Arpaio doesn’t want to do police public streets in HOA subdivisions. And we well know the great care and concern for proper procedure and obedience to the laws as exhibited by HOAs today in other areas. Can an incident like in Sanford happen with this grant of unrestricted powers?

Won’t happen here? Too far fetched? Wanna bet? To a lesser extent lawlessness  is happening everyday in HOA-Land, with respect to such issues as, failing to respond to records requests, making up rules on the fly, arbitrarily fining people, “political machine” elections, and going to court on the most trivial grounds, etc.  Now what will these rogue boards do next?

tort suit against HOA brings homeowners $3.9 million in awards

Here are the tort suits that  can be brought against almost any rogue or knowledgeable Board that intentionally ignores the laws. Note there’s only one complaint for a breach of contract. Keep them this in mind!

The decision in a jury trial of a suit against a condo in Hawaii brought,

“The jury found the condominium association’s board of directors, and its employees and agents violated state condominium laws. They were also found to be engaged in a variety of illegal acts including racketeering, civil conspiracy, gross negligence, malicious prosecution, breach of contract, and both negligent and intentional infliction of emotional distress.”

Jury awards $3.87 million in Molokai condo dispute