HOA Constitutional Government

For legislators: poster-child case of HOA extortion of homeowners

This Florida case is the poster-child for the “standard operation procedures” by rogue HOA boards. The situation heard too many times by this advocate, and amounting to legalized extortion because most homeowners cannot afford to go to court for justice. And the HOA, its management firm, and its attorney all too well know this!

The “see no evil, hear no evil, speak no evil” attitude of state legislatures and their misguided belief that the HOA, like any other business are angels can do no wrong — and will protect the rights and freedoms of its members — must cease right now! This is another example of “us agin’ them” and the destruction of trust and social capital within HOAs.

The appellate court quoted,

“The trial court found that the complaint to foreclose the lien was premature. Agreeing with the trial court, the Third District noted, ‘Had the Association accepted and applied the tendered payments, the dispute would have been reduced to an inconsequential amount, and the Association’s attorneys could not in good faith have filed to foreclose the miniscule claim remaining.’ Ocean Two Condominium Ass’n v. Kliger, 983 So.2d 739 (Fla. 3d Dist. App. 2008).”

The court held,

“What can be gleaned from this record is that the association and its accounting methods were woefully inadequate to correctly ascertain and give notice of the amounts claimed to be due. Because of this imperfect record-keeping, the association did not make a proper claim of lien, nor did it give sufficient notice in its complaint of its claim. Had it done so, in all likelihood this case would not have even been filed. Saar showed that she consistently made the payments required and had detailed records to support her payments, many of which were not properly credited by the association. She paid all sums due in accordance with the notices and claim of lien.”

SAAR v. WELLESLEY AT LAKE CLARKE SHORES HOMEOWNERS ASSOCIATION, INC.

HOAs and the decline in community social capital

In a direct reference to HOAs and social capital, Craig Walton, speaking of conditions in Southern Nevada, comments on Rothman that the developer’s planned community [HOA] subdivision “created living that was intensely private” and reflect “the community’s preoccupation with the self.” Craig continues,

Rothman reflects on the need for public spaces and their recent decline “Parks and libraries offered shared space and commonality of values, civic interaction and socialization. They combined education, relaxation, and social cohesiveness, all desirable traits in a growing community. They were crucial building blocks, pieces of the puzzle of quality of life that served the community and enhanced its reputation. . . .This dire warning is rooted in the absence of social capital in southern Nevada, because the power of developers to obtain and use land for increasingly expensive housing goes unchecked by elected and appointed public officials.”

These associations do not create positive social capital consisting of social networks and connections with reciprocal relationships, social interactions, trustworthiness and mutual obligations between the powerful boards and the rank and file homeowners. Rather, HOAs are a major cause of the destruction of social capital within the subdivision community. And as HOAs have become institutionalized — being accepted without question as “that’s the way it is” — they have made a substantial contribution to the decline in social capital in America.

Read the complete paper, The Effect of Homeowners Associations on Social Capital in Communities

HOA advocates must deal with reality for success

In a study I did in 2009 on Bar complaints in total, using its reports, only 15% of the complaints submitted 2005 –2008 resulted either in a Bar sanction, or a Supreme Court finding of a violation of law – 9% for the SC and 6% for the Bar. Of all the cases involving the HOA attorneys, I am aware of only 2 cases that resulted in “guilty” findings – one brought by a court appointed Receiver and one by a judge.

The State Bar’s real name is, The Benevolent and Protective Order of Attorneys (BPOA).

Complaints filed against an attorney must follow the same process as in civil court: cite the laws and Rules of Conduct broken, and supply concrete evidence of wrongdoing.

In the past I posted copies of the Arizona AG’s response to requests for help, as well as ADRE’s “not my job” response. Both agencies said, “Go tell it to the Legislature.”

Arizona Attorney General will not prosecute for HOA justice

ADRE: Licensed AZ R.E. agents can do as they please in HOAs — Not My Job

Town bans citizens from discussing the government

BeatTheMatrix.com reports on a July 20, 2011 Fox16 Arkansas segment, Town to Ban Citizens from Discussing City Matters without Permission,

A small Arkansas town (Gould) is attempting to ban groups from meeting to talk about the city without first getting prior permission from the city itself. Ordinance currently applies to all groups small and large including, but not limited to: bookclubs, boyscouts, and dinner table discussions.

Now, I fully understand the appeal of “no government interference,” especially when, as this incident suggests, the legislators or city council have been out in the sun too long, or the water supply is contaminated, or the council has been possessed at night by these pods under their beds and are really aliens. The city has declared “an emergency to preserve the peace, health and safety” from The Citizen’s Advisory Council. The city has banned the Council because it “is causing confusion and discourse [that means plain ol’ talking] among the citizens . . . contributing friction between the mayor and the Council [not clear if they meant Advisory or City Council], but also among the citizens who deserve cooperative government.” (See ordinance). In short, “There’s trouble in River City”.

Note, though, the City took panes to provide some reasonable, legitimate government interest to violate the people’s right to free assembly and to petition the government for redress of grievances, as set forth in the First Amendment. We don’t even see that with bills passed by our state legislatures, since the “sovereign can do no wrong.”

I guess the city has been following what the multitude of private governments in HOA-Land have been getting away with and are nor saying, “Me, too! We want to ignore the Constitution, too. After all, we are the legitimate government in this state.” Or, are they?

HOA boards can be sued and not covered by insurance

Much of the abuse by boards, the management firms, and attorneys are tortious acts that are illegal and also constitute a fraud upon the members. You will not hear this at pro-HOA seminars sponsored by local governments and/or taught by CAI attorneys.

“D & O” means “directors and officers.”

“Most, if not all, D&O policies contain a provision that excludes intentional criminal and fraudulent acts committed by board members,” says Collins. “However, [our policy] will continue to defend the directors and/or officers until such time that a criminal action can be proven. The policy will then cease to provide any further protection once it is determined that a board member knowingly committed a criminal or fraudulent act.”

D&O coverage also doesn’t indemnify a board or board member against decisions made “in bad faith,” or with illegal intent. If a board is found to have acted in an illegal manner—deliberately discriminating against a prospective buyer, for example—and are hit with punitive damages, members are on their own when it comes to paying them.

The reason for pursuing these actions acts of bad faith is to force the homeowner into court, where the attorney gets his fees and the HOA gets a free ride, most of the time. Directors and officers are legally bound to act in good faith toward their members.

The ABC’s of D&O