Why CAI is the Evil Empire

Advocates, the public in general, the media, and especially state legislatures need to understand the power of the miniscule member CAI that has them conned.  CAI dominates the HOA institution, or as I designate the fragmented collection of HOAs, HOA-Land. My initial research was conducted in 2007 and updated 10 years later in 2017.[1]  I summarize my research on the size of CAI and its membership breakdown below.

The research was based on CAI data and the US Census at that time.  To the point, from the 2017 study:

  1. Being concerned about the frequency of fixed ratios found in (A), I came across data from the CAI Indiana chapter for 2015 and 2016.[2] The percent ‘volunteers’ per HOA for both years was 32.7% and 32.8%, respectively. Very consistent.
  1. Of the 69 M people in HOAs, CAI membership, at most, consists of a miniscule .05% (.00048).
  1. Of the 33,000 CAI members, a minority of some 10,800 are ‘volunteers’ and not attorneys or managers.
  1. ‘Volunteers’ (CAVL) represent a miniscule .016% (.00016) of HOA members.

In contrast, AARP is a tremendous national powerhouse lobbyist representing, as reported in the 2014 WSJ article, some 37.8 million members.   In contrast, 2010 AARP states membership of 35,700,000, and that’s  36% of the 50 plus population based on the US Census  estimate.

Analyzing CAI’s membership and governing Board of Trustees structure revealed  HOA “volunteers” are in the minority. “That’s about 14% representation by homeowners on the CAI governing body whose membership consists of 60% homeowner “volunteers.”[3]

So, who’s afraid of Virginia Wolf?  We should be!  Look what this miniscule minority managed to achieve over the years!  Please understand, though, CAI is vulnerable and has made adjustments in the past based on published criticisms by advocates.  We must not be afraid to call it what it is, using concrete documents and especially CAI’s own words.

FYI — Outstanding is a complaint filed with the antitrust division of the DOJ alleging that CAI is a monopoly.[4]

References

[1] See CAI miniscule minority dominates public policy (2007); CAI 2016 Factbook: looking into the ‘facts’.

[2] CAI Indiana chapter document.

[3] Who controls CAI and its 50 state HOA lobbying committees? (2012).

[4]  See The need to regulate CAI monopoly. (2023).

 

Decl. of Indep. from HOA government — 2000

At this time when advocates are urging homeowners to present reform bills to their legislature, this earlier post of mine revealed the problem dealing with the legislature from the very beginning.  This 2014 repost refers to my appearance before the Arizona HOA Hearing committee in 2000, which also appeared in Robert Nelson’s book (p. 102) published by the Urban Institute Press.   

****

“In 2000, as a naïve and newbie to the politics at state legislatures, Arizona in particular, I addressed the HOA Study Committee on September 7th (3rd such meeting of unfulfilled 7) and submitted a statement titled, “HOMEOWNER’S DECLARATION OF INDEPENDENCE  from homeowner association governments.”  In it I quoted parts of the Decl. of Indep. And informed the committee that I had hoped that these hearings would bring forth a list of grievances for which homeowners were seeking redress. 

[In 2000 I testified – – -]

“And as in those times of 1776, a small, principled and dedicated group of citizens are seeking a redress of their grievances. They first looked to the existing government, the HOA Board, and failing to obtain satisfaction therein, must seek other means of redress – a radical change in the concept and legal structure of the homeowner association controlling document, the CC&Rs.

“Mr. Chairman, ladies and gentlemen of the Committee, at this time I had hoped that the citizens of Arizona would be able to present and enumerate their long list of abuses, and solutions to these abuses, similar to as is found enumerated in the Declaration of Independence, without the interference and obstruction by elements of these ‘oppressive governments.’  I see that this will not be the case.

“The people of Arizona only wish to be able to present their case before this Committee in a fair and just manner. However, sadly I feel that, because of the composition of the committee, the homeowners are actually being placed on trial; that they are being asked to justify their grievances before their oppressors” [CAI].

****

Today, I think it would be helpful to adopt my statement and add those grievances that you feel need to be solved, and submit the entire package to your legislature and the media.  It would be your declaration from HOA governments, your petition for redress. Of course, the more signatures you have the better. 

Where have all the HOA constitutional lawyers gone?

Many of you who are interested in the hidden truth about HOA-Land are probably aware of the AARP report on member bill of rights written by David Kahane in 2006. You are probably unaware of the 2006 AARP amicus curiae brief filed in favor of the Twin Rivers, NJ homeowners.[i] 

This landmark brief references Evan McKenzie, the Hannaman Report,[ii] CAI’s Wayne Hyatt  (former president and designer of many governing documents especially for Del Webb properties),[iii] a 1989 Intergovernmental study on HOA private governments, and the Restatement Law: Servitudes.  Co-attorney on the brief was Steven Siegel who wrote several legal journal articles on HOA constitutionality (1998 and 2008).[iv]

Where have all our lawyers gone? Long time passing. 
Where have all our lawyers gone?  Long time ago. 
Where have all our lawyers gone?  C A I beat them everyone.

Oh, when will we ever learn?  Oh, when will we ever learn?[v]

I’ve always found this very troublesome. They have the credentials; we don’t!  Complaining and shouting, We was robbed; this ain’t fair; this is not right; I have rights falls on deaf ears at the legislatures. Advocates have failed to make the case for the existence of a nationwide problem where legislatures permit the denial of homeowners’ fundamental and constitutional rights and freedoms, privileges, and immunities.  And the courts look the other way for the most part. 

And when reform bills of substance do make it into law, homeowners for the most part still remain silent and ignore the laws that give them fighting powers – laws passed recently in California, Nevada, Arizona, North Carolina, New Jersey, and Washington state.

References

[i] AARP_amicus.pdf

[ii] See Rutgers Panel on Homeowner Association problems (pvtgov.org).

[iii] To be or not to be a mini or quasi government? Hyatt said ‘yes’.

[iv] Steven Siegel, “The Constitution and Private Government: Toward the Recognition of Constitutional Rights in Private Residential Communities Fifty years After Marsh v. Alabama,” Wm & Mary Bill of Rights J., Vol. 6, Issue 2 (1998). And The Twin Rivers Case: Of Homeowners Associations, Free Speech Rights and Privatized Mini-Governments, Paula A. Franzese and Steven Siegel, 5 Rutgers J.L. & Pub. Pol’y 630 (2008).  Part of the issue on Homeowner Associations: Problems and Solutions.

[v] Paraphrase Where Have All the Flowers Gone, Peter, Paul and Mary.

NC reform bills need your support

Three very material and important bills seeking meaningful HOA reforms are before the North Carolina General Assembly (legislature): H311, S312, and H542.  (See ‘There is no oversight’ Proposed bills call for changes to HOAs in North Carolina). These bills address the two categories of reform legislation as I have defined them: constitutional and operational.

It has been my experience over some 23 years that reform legislation falls into two categorical levels: constitutional seeking to change the systemic HOA scheme, and operational seeking to apply the existing day-to-day laws and governing documents in a fair and just manner.

The average homeowner does not quite understand the broader constitutional issues but well feels the effects of the current day-to-day conditions. AN example of operational reform would be to change the time frame or approval percentage of an existing covenant. It’s a procedural change.

H311,

An act to establish a community association oversight division in the office of the attorney general.  In short, the AG is authorized to investigate HOA wrongdoing and to take remedial action including legal action, if so determined. The division is a rulemaking body —  adopt and change rules —  to carry out its authority. It is a constitutional 14th Amendment due process and equal protection of the laws bill.

S312,

An act that requires notice of liens and the ability to foreclose. A lengthy bill to inform the homeowner that a lien has been placed on his property and the right to work out a repayment plan. While the right to foreclose is removed, the HOA can proceed with legal action to obtain payment of the debt, like garnishment, etc. It has a constitutional aspect in removing the right to foreclose – seen as a special law for a special entity, the HOA – and an operational aspect with respect to the procedures to follow in attempting to collect the unpaid assessments.

H542,

An act placing a limit on foreclosure and notice of a lien. The lien notice is similar to S312. The bill also sets a $2,500 minimum, or 1 year of unpaid assessments not paid within 30 days. It is an operational bill dealing with everyday procedures.

I prefer S312 over H542 since HOA foreclosure rights are unreasonable, against good public policy, and whose purpose is to serve as a punishment.  What right does a private entity, that has not advanced any hard cash like a bank, have to receive foreclosure payments far in excess of the HOA assessment debt that also includes exorbitant attorney payments not found in the public sector?

[Please feel free to repost with proper credit].

Homeowner price for justice and enforcement

Stan Hrincevich, President of the Coloradohoaforum.com, wrote a YourHub, Denver Post opinion on May 4th, HOA homeowner’s rights and voting rights of yesteryear.  Stan severely criticizes HOA justice for homeowners and the inequality of the financial costs to obtain justice.

“You have the right to vote but now you have to pay a poll tax and can’t afford to vote. . . . However, this seemingly fair mode of governance ensuring the rights of the homeowner and HOA is as much an illusion as ensuring voting rights in the late 1800s accompanied by the poll tax. HOA justice for homeowners is a pay-to-play enforcement system. If one has deep financial pockets, time, and legal resources, one can pursue one’s rights under their HOA governing documents. Others without such resources cannot.”

He recommends non-judicial hearings which, I assume, would include stronger enforcement of the decisions and the law than currently today in Colorado and in every other state. Implied is a reduced cost to homeowners  – the removal of the present day poll tax. 

I’ve also argued that the current status of HOA justice has the same effect as if it were a poll tax (made unlawful by LBJ in 1964)[1]. But the real obstacle to homeowner justice is the lack of state enforcement of HOA board violations of the law and the governing documents.  The vast majority of the reform laws rely on the good will of the HOA board and its attorneys to act in good faith with the intent of the law.  However, the conduct and acts of the HOAs and their attorneys has demonstrated that this reliance is unfounded. They should be held accountable as if they were municipal government employees.

“If there is no penalty [for] disobedience, the resolutions or commands which pretend to be laws will, in fact, amount to nothing more than advice or recommendation.”    (Alexander Hamilton, Federalist #15)

“Your HOA board (BOD) is unaccountable under state laws with trivial, if any, penalties, or punishments for violations of state laws or the governing documents?  Without meaningful enforcement to hold BODs accountable and to serve as a detriment to continued violations, you are forced to sue just to get compliance.”[2]

I strongly agree with Stan, reform can only come from the legislature enacting just laws and removing pro-HOA laws.

Notes.

  1. Poll Tax postings on HOA Constitutional Government. To say that a homeowner can go to court for a redress of grievances would be like saying that there was nothing wrong with the 1950s Poll Tax abomination, used as an effective, legal at the time, devise to stop voter registrations. (April 2010 Letter to NC House Select HOA Committee); In the late 1950s the Southern states enacted a Poll Tax and instituted certain “tests” in order for citizens to be eligible to register to vote.  No federal or state laws were violated, since the states were permitted to determine the methods for registering citizens, so long as it was not based on race (15th Amendment).  Of course, the tax was set at a level very few Blacks could afford to pay (Dec. 2008, Goldwater Institute: separate and unequal constitutions for HOAs);  Civil action amounts to a bar against justice much as the imposition of poll tax in the South in the 1950s used to prevent blacks from registering to vote. Justice for the average homeowner cannot be had a price which he cannot afford while the association is allowed to use member dues to hire a lawyer (June 2006, Where’s California’s Homeowners Bill of Rights?

2.      See HOA-Land Nation “Did you know?” Part 2 (2019).