The power of private HOA contracts, and other “voices of the people”

A scenario, not so hypothetical, and only to emphasize my point.

Suppose a group of ethnic people in a subdivision draft a set of “mother country” laws to govern the community. That among these contractual laws, by virtue of just remaining within the community and not moving out, are covenants that concern the proper treatment of marriage, of women, and of children. Anyone entering into the community is held subject to the community laws and Mother Country punishments. Will this private contract prevail over US law? Why not? HOA contracts do. What’s the difference?

Now suppose a group of homeowners living in an HOA do the same thing? Suppose they argue, as in the Dec. of Indepen., that the HOA government is illegitimate and invalid for various reasons including contract fraud, unconstitutional, and contrary to public policy. That they therefore reject the HOA government. Which contract shall prevail? The Mother County contract or the HOA? Can the HOA claim that their contract is superior to the will of the people in this group, as they have done in turn with civil laws? What’s the difference? Who is right?

Is this country, and your state, under the rule of law or the rule of man?  Where any group can write an agreement to circumvent the US and state constitutions.

Obstacles to substantive HOA reform legislation

What comes out loud and clear, from the Arizona senatorial debate (Arizona Senators debate HOA legal status), as obstacles to substantive HOA reform legislation is the dogmatic belief by many in the righteousness of the HOA legal scheme. That the will of the people shall be allowed to prevail, without restraint of any kind, over the supreme law of the land.

Until advocates can reconcile their belief in the benefits of their HOA with the need for substantive HOA reform legislation, what can they expect of others? And that requires not surrendering to the irrational fear of losing their HOA, as pro-HOA supporters find useful to prevent necessary reforms.

Until advocates are able to get the policy makers, the legislators, to reconcile their belief in the benefits of HOAs with the need to rewrite the HOA legal concept, there will be no substantive reforms. And advocates will return year after year with their “petitions for redress” only to have their petitions “answered only by repeated injury.”

But first, they must look inward, toward themselves.

Arizona Senators debate HOA legal status

 The Voice of Times Past  and the Voice of Times Present

 

A lengthy exchange, exemplifying  the polarized views of the HOA legal concept occurred between two committee members  during the Senate VMGA Committee hearing on SB 1113, control of public roadways  (Jan. 31, 2012).  I refer to the two Senators as the Voice of Times Past and the Voice of Times Present.

Senator  John Nelson, Times Past,  speaks from the past and echoes the pro-HOA themes of maintaining property values, of freedom of contract, and unquestioned consent to agree  and full compliance with contract law.  His position speaks in favor of HOAs as independent principalities above all other laws of the land, holding that private parties can contract to avoid the Constitution and laws of the land.

I do not mean to be disrespectful,   as the Senator appears to truly believe in his position — and we all are entitled to our beliefs — yet he  has not realized the implications of his beliefs on his duties and obligations as a state senator.   He has  failed to address the consequences and impact on society of such beliefs, which have become  ingrained and dogmatic over the many years

Senator Frank Antenori, Times Present, speaks of constitutional infringements by the HOA legal concept and of violations  of our principles of democratic government by de facto  private entities unaccountable under the Constitution. These issues were  also raised by the bill sponsor, Senator Nancy Barto. 

What is apparent in this exchange is that to resolve the alleged safety issues on street parking, the HOA simply refuses to make use of the legal vehicle of seeking planning board variations, thus making this a political power issue between public government and private HOA principalities.  Furthermore, putting “we can contract to do anything we want,” even to ignore the laws of the land, is an absurdity too often used by those seeking unrestrained power, and too  often irresponsibly thrown about.  Case law has repeatedly rejected any such unqualified authority. 

(It should be noted that CAI did not speak at this hearing, and it’s member blog did not address constitutional issues of de facto private governments seeking special treatment above the laws of the land).

What  the Voice of Times Yet To Come  will have to say depends on what occurs today, in Arizona, and  in all state legislatures across the country.   Will the 200 plus year American experiment in democratic government be extinguished by a successful second, 48 year American experiment in private, authoritarian government functioning  under fascist principles?

The bill squeaked by and was passed by a 4 – 3 vote.

 The complete public video of the hearing can be found in the Arizona Legislature video archives for that hearing (click here).   Jump to 39:00 minutes for the 30 minute exchange.  After viewing the video, you will better understand how HOAs have become a second political government at the local level, and what legislative obstacles lay in the way to susbstantive HOA reform legislation. 

At about the same time as this Arizona debate, an NPR radio talk show took place  in Charlotte, NC (WFAE,  Charlotte Talks, Mike Collins, host)  that also addressed the good, the bad and the ugly of HOAs.  It is well worth listening too, as it also addresses public policy concerns. The link can be found at the  North Carolina Coalition for Homeowners Rights website.

See also, 

1.  Evan McKenzie’s Privatopia Papers contribution to the constitutional issues debate, HOA debate: illegitimate government and invalid CC&Rs contract.

2.  HOA-Land — the failure to democratize.

Where are the volunteer HOA board members?

“We’ve been unable to even elect officers,” Freedman said during a state (WA) Senate hearing this week on a bill that would allow homeowners’ associations to lower their quorum requirement to 34 percent through the county court system.

(Homeowners’ associations ask state for help)

The downside of the great and glorious innovation in housing is hitting hard, because the defective legal scheme provides for no downside protections. As successful promoters well understand, and are so motivated, just sell the upside and don’t worry about the downside. Everybody eagerly bought into this sales pitch, and still are, including state legislators.

And lowering quorum requirements only allows the political machines and cliques to retain even more power of their failing HOAs.

As covered in this week’s CHDB blog by Patel (AZ CAI law firm in Arizona headed by CCAL president-elect Carpenter), Where are the volunteer board members? (No Board – Now What?). The end result is that HOA corporations require a board in order to legally function, and the state will wind up having to protect their “investment” in planned communities/HOAs by the courts appointing Receivers to run these HOAs, or let them fail. An alternative not clearly spelled out in the CAI blog.

The unaccountable “free ride” of doing as I please without fear of enforcement penalties under state laws is coming to a close as a direct result of the uncontrolled abuse within the HOA industry.  As a direct result of the actions of homeowner rights advocates, and the few media willing to tell it like it is, state legislators are beginning to see the light and put an end to these independent principalities.

NC media “tells it like it is” and reports HOA information

It is quite a pleasing surprise to see the North Carolina media cover the important HOA hearing that took place for 3 hours yesterday by the House Select HOA Committee, led by the Charlotte Observer. The NC media has lived up to its obligations to provide a free press that covers all sides of the issue, like it or not, which is necessary for the proper functioning of a democracy. That’s why “free speech” protections were made the First Amendment.

I congratulate the proactive NC HOA homeowner rights advocates for their successful campaign to get the message out. The policy makers and the buying public need the whole truth in order to make sound decisions. Among the leaders are Jim Lane, Jane Jordan and Ole Madsen. Keep it up! Keep the ball rolling, and remember Gandhi, “We must continue to provoke until they respond and change the laws.”

You know, having attended years of Arizona legislative committee hearings, every now and then I would get a whine from a legislator, “When are we going to hear the end of HOA complaints?” I answered, When the legislature gets things right and stands up for the Constitution, and that starts with an open mind to all the facts. Local community government must truly be “of the people, by the people and for the people,” and not by profit-seeking developers with their top-down cramming of covenants, and government officials selling out their obligations to the people for a few shillings.

The perceived benefits of the planned community real estate package of ‘district’ ordinances and taxes and ‘private’ amenities can remain under a government that retains our constitutional system of democracy.  There are no excuses for this not to happen.  It is only when the facts get out for an open discussion will this happen.  Thanks again to the NC media “telling it like it is.”

See, advocate’s 10-point statement to NC HOA committee,  HOAs today do not exist for the benefit of Homeowners,  Statement to NC Select HOA Committee.