Truth in HOAs disclosure poll — please vote your conscience

Please let us know where you stand on the HOA issues of “agreement to be governed” and “consent to obey.”   If the following Truth in HOAs Disclosure Agreement were required to be signed at the time of purchase, would you sign or not sign your waiver and surrender of your rights and give you explicit consent to be governed?

Homeowner Association (HOA)
Buyer “Truth in HOAs” Disclosure
&
Consent to be Governed Agreement

 

By my signature below, I , the undersigned Buyer, have read and understood the restrictions imposed upon me by law and the courts as a member of an HOA, and have agreed to the waiver and/or surrender of my rights explicitly contained below. All other rights not expressly prohibited below or expressly granted below to the HOA are retained by me.

I, the undersigned Buyer, and the undersigned HOA by its President, hereby acknowledge and consent to the following:

(a) that the declaration of covenants, conditions and restrictions (CC&Rs), the bylaws, and any written rules and regulations are treated as binding private contracts by the courts; and that to enforce my rights under or compliance with the governing documents I must file suit in civil court, and that such a civil suit involves no state agency official, attorney general, or county attorney ;

(b) that under current court holdings, I am legally bound by any and all amendment to these documents validly enacted in accordance with the governing documents, with or without my vote or consent, provided that they are found not to be unreasonable, contrary to public policy or unconstitutional; and that an amendment may alter the CC&Rs at the time of purchase, binding me to
the amendment without my consent;

(c) that under current law, there are no substantive penalties against violations of the governing documents or state laws by the officers or directors of the association sufficient to serve as a detriment to future violations;

(d) that the association (HOA), as a private entity and not an arm of the state, is not subject to the restrictions and prohibitions of the 14th Amendment to the US Constitution that otherwise protects the rights of the people against actions by public government entities; and that the governing documents in all legal practicality serve as the subdivision’s “constitution,” taking precedence over
state laws and the state and US Constitutions, unless specifically denied by any such laws or legal precedence;

(e) that the governing documents contain due process protections, in instances of alleged violations of the governing documents, that are less than as required under public laws and civil court procedures, that are lacking requirements for an independent tribunal, such as the right to introduce or confront witnesses, or the right to introduce and challenge contrary evidence;

(f) that in any dispute with the HOA, and contrary my rights under the federal fair debts collection practices act (FDCPA), the courts require continued payment of your assessments even while the dispute continues;

(g) that there are no equivalent clean or fair elections procedures as found in public government elections, to protect the integrity of the HOA election process; and

(h) that the practicable ability to institute member “initiatives” and make changes to the governing documents or ACC rules is highly dependent upon the active participation of my neighbors who, as a member of an HOA, have been described as indifferent and apathetic; and that there are no provisions for HOA board “referendums” on issues that ethically should be put to a vote of the members.

CAI firmly supports the New America of HOA-Land

This issue of the Community Association Institute’s house organ, Common Ground, has the strongest language for the triumph of private agreements to supersede the US Constitution, making the Constitution a meaningless piece of paper, a meaningless document, and an empty compact between the people and the state. “The right to regulate activities within a community association is an embodiment of our constitutional rights to enter into agreements with our neighbors” so proclaims CAI. It implies that the community association is just another corporate entity, and not the governing body that regulates and controls the people within its borders, which is the essential ingredient that distinguishes a corporation from a political government, a state.

CAI is falsely arguing that anybody can write an agreement to circumvent the Constitutional protections that forms the basis of our political system of government. In essence, CAI is advocating the rejection of the Constitution as the supreme law of the land and you and your neighbor can draft a new constitution as you see fit, ignoring the original Founding Fathers document. And so can another group, and another, and another, and so on. Why Is CAI arguning so? Perhaps because as private organizations, HOAs are not bound by the Constitution and can do as they please – the Constitution be damned!

CAI bitterly complains in this piece about one “disgruntled resident “[who] used the power of government to limit the freedoms of association residents” and caused Arizona to use its legitimate police powers to regulate people and organizations, and to protect the constitutional free speech rights to fly the Gadsden Flag in HOAs

And, seemingly desperate, CAI lets its readers know where it stands: The one constant is that your colleagues at CAI, working through 33 state legislative action committees, are fighting to protect associations and ensure a healthy business environment for the companies that support our communities” (Emphasis added). CAI does not stand for the people, but for the undemocratic governing body of subdivision territories known as homeowners associations. And, CAI says it loud and clear, making it quite explicit: CAI is “fighting to . . . ensure a healthy business environment for the companies that support our communities.”That is, for their members, the lawyers and their self-proclaimed professional management firms. Let the Legislators hear well!

CAI is firmly behind the New America of HOA-Land of independent principalities unaccountable to any state in the Union. A balkanized hodge-podge of independent “city-states, under a parallel constitution known as the Uniform Common-Interest Ownership Model Act (UCIOA) and its variants across this country. Brought to you by the legal-academic aristocrats who have avoided any discussion of secession or repudiation of the principles of our American system of government. But, running to the state for protection as any principality must do. And the civil government of the state abdicates its duties under the US and state Constitutions, and protects these regimes against its own citizens.

“Fees, Finances and Flags,” Common Ground July-Aug 2011, CAI.

Twin Rivers and NJ HOA free speech rights, redux

Here we go again! Once again revisiting the question of free speech rights to display signs in a New Jersey HOA. In Mazdabrook v. Khan the appellate court revisited Twin Rivers and the underlying “test case’, State v. Schmidt, but with a different outcome in favor of free speech. I find it very interesting how our judicial system analyzes and bisects broad legal principles into 1001 “and, if or buts” micro-segments. How is the average person to know what is legal and what is not? Must he go to an attorney, who may or may not know but will take you to court to find out?

In Mazdabrook the homeowner placed campaign signs for his election as major of the town, not a for sale sign, but the HOA had governing documents permitting only for sale signs and no others. The court said No, No, No, that’s content-based restriction on commercial advertising and a constitutional violation of free speech rights and a total ban on other signs. In contrast to Twin Rivers, the HOA sign restriction to allow a sign in every window and one outside sign no more than three feet from the house was held not to be an unreasonable burden on the owner’s free speech rights. It cited the Restatement of Property “suggestion” that a covenant is not valid if it “not mentioning the obvious that a covenant is also invalid if it were unconstitutional.”

See, as to another question of reasonableness, the NJ Esposito case, In NJ, HOA boards do not have to be reasonable, and go figure how our judicial system works. See also the link to the Paula Franzese and Steven Siegel critique of the Twin Rivers decision in Rutgers Journal articles on HOAs and Twin Rivers case.

OF SPECIAL INTEREST and importance is the dissenting opinion of a judge who addressed such questions as: the waiver of one’s rights when simply taking possession of his deed, the implied consent to be governed, and a surprising reference to the waiver of ex post facto rights. Where did he get that from??? I wonder?

I’ve been told that the appellate decision has been appealed to the very same NJ Supreme Court, but oral arguments have not yet been heard. Also, the Rutgers Constitutional Law Clinic under Frank Askin, the party that represented the homeowners in Twin Rivers, has filed an amicus curiae brief for ACLU, and will be allowed to make an oral argument.

Cases

Mazdabrook v. Khan (N.J. Super. A.D., 2010, unpublished).

CBTR v. Twin Rivers, 929 A.2d 1060 (2007).

State v. Schmidt, 423 A.2d 615 (1980).

In NJ, HOA boards do not have to be reasonable

Nor in any other state that stands by the Business Judgment Rule (BJR) doctrine.

 

Re: Esposito v. Riviera at Freehold HOA, No. A-6001-09T1, (NJ Supr.Ct App. Div. April 2011).

 

This appellate court decision reflects what’s wrong with our judicial system with its doctrine of binding precedents, stare decisis, that is used to uphold earlier decisions even if they may be obviously unjust by anyone’s standard. It perpetuates injustice and judicial bias, as we see with HOA decisions. In Esposito, the court cited the protections for homeowners based on the Twin Rivers NJ Supreme Court opinion,

 

The protections for common interest residents were described by the Court in [Twin Rivers]. The Court noted that (emphasis added):

 

First, the business judgment rule protects common interest community residents from arbitrary decision-making. . . . Pursuant to the business judgment rule, a homeowners’ association’s rules and regulations will be invalidated (1) if they are not authorized by statute or by the bylaws or master deed, or (2) if the association’s actions are “fraudulent, self-dealing or unconscionable.” Our Appellate Division has uniformly invoked the business judgment rule in cases involving homeowners’ associations.

 

[It should be noted that this ipse dixit (a dictum in the courts) that homeowners were protected by the business judgment rule was an “offering” to mollify homeowners who just had their constitutional protections to free speech rejected by the NJ Supreme Court.]

 

Note the BJR absence of reasonableness in board decision making as found in the Restatement (Third) of Property: Servitudes, § 3.1(2) – (4), and elsewhere. However, the homeowners were well aware of reasonableness as a criteria for valid decisions and argued the “material adverse effect” standard that includes reasonableness as a criteria instead of the BJR. Unfortunately, the Court quickly perceived that this standard only applied to condominiums as indicated in the court decision (Billig v. Buckingham Condominium Association I, Inc., 287 N.J.Super. 551 (App. Div. 1996)).

 

The Court decided that, emphasis added,

 

The trial judge held that since the Association was not a condominium association, the Condominium Act did not apply, and he refused to extend the “reasonableness” and “material adverse effect” standard in Billig to this matter. After a careful review of the record and weighing of the evidence, we see no reason to disturb the judgment requiring replacement of the door. We reach this decision based on the finding of facts by the trial court, which are adequately supported by the evidence, and essentially for the legal conclusions expressed in [the trial judge’s] comprehensive and thoughtful opinion.

What about justice? Why is reasonableness required for justice to be served in condos but not in HOAs? HOAs are sui generis, a combination of nonprofit and governmental functions. They are not just another run-of-the-mill nonprofit with ease of entry and access, and without liens or foreclosure penalties. Don’t they deserve a heightened degree of homeowner protection as provided under the “material adverse effect” and Restatement doctrines? Are we a nation of laws to serve justice or a nation of men to decide as they please?

 

[As to the nature of this complaint, the homeowner replaced his “colonial” style door with a “gothic” style door, which I am told are quite different. Esposito claimed that the property manger gave him a verbal OK, which he relied on, but submittted a change approval after the fact. The ACC, as we all could anticipate, denied the after-the-fact request. And so the suit progressed. Why, it can be reasonbly asked without fears of lost income, didn’t the board or ACC simply say it was quite unreasonable to replace a colonial with a gothic? You don’t need a King Solomon to nake this rational, reasonable, decision. Well, maybe so if you accept McKenzie’s view that incompetent people are conscripted to run HOAs and who affect the individual homeowner’s finances. Was it undue lawyer influence based on the fear of lost fees?]

 

Returnng to the argument at hand, judicial bias against HOAs, as I wrote previously in Judicial precedent and HOA bias,

The researchers found that the doctrine of stare decisis, itself, falls victim to the preferences of the judges. “Stare decisis is the rule of law that imports the aura of legitimacy on the judicial process by holding future decisions to be bound by prior decisions that serve as “precedent.” The doctrine of stare decisis ‘permits society to presume that bedrock principles are founded in the law rather than in the proclivities of individuals, and thereby contributes to the integrity of our constitutional system of government. Vasquez v. Hillery, 474 US 254 (1986).’

 

In HOAs in America, I quoted William B. Allen’scomments on Machiavelli’s The Prince, which helps illuminate my argument. In his commentary Allen wrote that “the role of morals in politics is mainly to cultivate illusions,” and that “politics is merely appearance and morality is merely pretense.” And speaking of justice, the necessary ingredient for the claim to the legitimacy of government and to be obeyed in conscience, Allen offers Machiavelli’s advice, “Because the [right] to rule is rather the appearance of justice rather than justice itself, the appearance of injustice defeats every [right] to rule.”

HOA limitations: conscripting people who cannot run an HOA

Highlights of the The Urban Institute Forum, June 30, 2011, Private Community Associations: Boon or Bane for Local Governance?

Sadly, Robert Nelson’s pro-HOA opening statement was filled with the myths, misconceptions and half-truths that perpetuate the laissez-faire attitude from government. Legislatures that have failed to reign in these undemocratic private, second political system of government known as HOAs. He is part of what I term the legal-academic aristocrats. McKenzie’s response rejected what he called Nelson’s theoretical, alternate form of government, saying that, “If you actually look at the reality of the way these [HOAs] . . . function, they do not fit these assumptions at all.”

McKenzie said that, for example, this “volunteerism” simply doesn’t happen, since, as it appears that,as all the “common people” know, the agreements are created by the developer’s attorneys and handed down. There is no give and take in creating this form of individualized local government, so often touted as town hall government at work in HOAs. McKenzie described these declarations as “boiler plate”, and mentioned seeing covenants relating to elevators when there were none in the subdivision.

“People are “conscripted” into these associations if you buy the lot”, he further added. They are then told “that they consented to the agreement, but that’s a legal fiction.” “And realtors don’t even tell them anything about it.” In reality, he continued, “the people really don’t control their association, the dead hand of the developer does” since changing the CC&Rs is difficult to do. [With respect to the past attempt at Arizona legislation to allow 1/3 of the members to change the CC&Rs for everyone does not address the problem of ex post facto contracts].

Addressing the contractual legal scheme, McKenzie stated that, “This [HOA legal scheme] is a model . . . that trickled down from the top of the income distribution . . . . It is probably a form of governance that would work reasonably well if practiced by 1% of the population.” The wealthy and reasonably affluent with money “who can hire lawyers and who came in with their eyes open and knew what they were getting into.” In other words, a specialized, utopian, perhaps cult community for the wealthy. As I’ve written many times, McKenzie said the mass merchandising [my words] was driven not by the people demanding HOAs, but by the developers and municipalities that are increasingly mandating only HOA regimes for new developments. There is no free market system at work, no freedom of choice.

As this mass marketing proceeds, “you begin to conscript people into this mass housing who cannot run it.” In particular in today’s climate, the failure to establish adequate capital reserves to offset decreased income. Well, isn’t that also a failure of the national HOA educational organization that “certifies” HOA managers for the past 40 years?

“The idea of private government is fine,” according to McKenzie, “for people who can afford to operate it. Imposing this on people, which we have done, who cannot run it, who don’t know how to run meetings, who won’t go to board meetings at all . . . . What we are seeing is professional people, managers and lawyers actually running the associations.” You know, the “hired hands.” “The priority on foreclosure is driven by the professionals. It is not driven by what’s best for the community.”

“The owners are not loyal to their association. They put up flagpoles because they don’t think they are legitimate.”

The policy makers and public interest ‘influencers” should pay attention to the realties before them, and cease their dogmatic, unworkable ideology. This Forum is a good start.