HOA Advisory Notice: “You are on your own”

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. James Madison, The Federalist Papers, No. 51.

HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments. Prof. Evan McKenzie, Privatopia.

In my 9 plus years as a homeowner rights advocate with many appearances before the Arizona legislative committees, and before committees in other states,
 

 

the legislators have repeatedly refused to protect homeowners living in homeowners associations.

  

In general, they feel that the homeowner was fully informed and willingly accepted everything and all actions of the HOA board and officers. They have repeatedly rejected legislation to hold the HOA accountable to the state as a matter of good public policy, justice and the equal treatment of all citizens. They have repeatedly rejected punitive enforcement against HOA board violations of existing state laws, as is the generally accepted practice in the public arena, to serve as deterrents for such future actions by the HOA, or other HOAs; they have rejected bona fide fair trial due process hearings of HOA complaints by an independent tribunal where evidence must be presented and witnessed and accusers available for questioning.
 

 

They continue to believe, in the face of repeated abuse, that homeowners are not disadvantaged in attaining justice, and that the alleged benefits of HOA living outweigh any loss of rights or in equal justice under the law.

  

 

The Attorney General, also, with authority to act on consumer complaints relating to real estate, has repeatedly refused to act to protect homeowners against abusive HOAs.
Your government believes that the overriding objective of the US Constitution is “no contract interference with HOAs” and that all other protections and prohibitions are of secondary concern.
  

Therefore, the homeowner is at the sufferance of the HOA board and of his fellow neighbors who allow such abuse to continue, without any effective means to attain equal justice under the law. 

There is no motivation for an HOA not to violate the laws and governing documents

 

  

because the legislature has allowed the HOA to do so, for all intents and purposes, with impunity.

Fundamental government functions: public or private HOA

Last month I commented on The Goldwater Institute’s Local Liberty Charter by Nick Dranias, its Director of the Center for Constitutional Government. The title asked the following question: Whither goest local government? Restrictive HOAs or responsible public government? A “follow-up” question that was not raised is:

Disregarding the knee-jerk reaction by those opposed to government involvement, “private enterprise can do the job better than government”, why, in the face of the serious problems surrounding the restrictive covenant, private government HOAs, does The Institute believe that restrictive covenants will provide for a better government?

It must be understood that we are not talking about providing services, such as trash, utilities, etc., but the basic functions of a government itself. What then becomes of public local government? In essence, the very concept of public government becomes an anachronism, replaced by myriads of independent local “principalities” since our now antiquated concept of government does not permit it to interfere with these private arrangements. What becomes of that initial contract between the people and its government, commonly known and referred to as the US Constitution? What becomes of the protections of individual freedoms and liberties protected by the Constitution?

Are these the concerns of the homeowners living in HOAs — those people whom we are told actually prefer and “love” HOAs? Definitely yes! Just look at the HOA reform legislation of substance, other than those dealing with the day-to-day operations. You will see legislation that attempts to restore fundamental rights and freedoms and “equal justice under the law” to homeowners living in HOAs, that were taken away by special interest influenced legislation.

I congratulate Mr. Dranias, and Shu Bartholomew, for keeping HOA issues before the general public: the basic issue is private or public local government. However, I was disappointed that Mr. Dranias’ appearance on the On The Commons internet talk radio show this past Saturday did not address these important HOA constitutional concerns.

There was, though, a brief mention of a loss of constitutional protections in HOAs. In response to Shu’s concern for private security use of radar guns and the absence of constitutional protections found in the public domain (32 – 35 minute mark), Mr. Dranias gave a response that might have been missed by most listeners. He referred to the city “spinning out or spitting out” a private entity to handle functions that it wanted to unload that such an entity was an agent of the city and was “bound by the same responsibilities of the city.” He added that, “the city cannot avoid its constitutional restrictions by contracting.” He spoke of “if this is an inherent function of government and they chose to contract it out . . . that person would be subject to constitutional law.”

The key point here is that the state did not establish the HOA (court rulings so hold) and, therefore, these private governments are not subject to constitutional protections. Again, this is the reason why there is a strong visceral reaction by CAI to any mention that HOAs are de facto governments.

In response to my email to Mr. Dranias, I was told that he will be addressing the issue in a future report. I eagerly await this report, and I await his return to On The Commons to speak of these concerns.

How to secede from the Union without really trying: adopt the HOA legal scheme

Now, Texas Governor Perry may have hit on a bold crusade when he suggested that  Texas may withdraw from the United States, as reported by the AP on April 16th.  Imagine, a state seceding from the Union!

Talk of secession isn’t new.  Secession from local government has been going on over the years, in all states, on a subdivision by subdivision basis with the acceptance of homeowners associations.  In fact, there are many towns that co-exist within the boundaries of one homeowners association, giving rise to a “shadow government”, with the real power in the hands of the HOA board.

See  the secession of the HOA from the county as Robert Nelson wrote in his 2005 book, Private Neighborhoods and the Transformation of Local Government .

In the future, more complete forms of private secession may become possible. For example, if neighborhood associations become more numerous, the political pressures for substantial rebates from property taxes – for relief from the current system of ‘double taxation’ – are bound to grow.

And, the Goldwater Institute’s Policy Report of 100 ideas for 2009 looks to replacing local government with restrictive covenants:

41.  Give cities and counties the power to replace centralized and bureaucratic zoning and land use regulation with decentralized and privately-enforced restrictive covenants.

 

(See also The future of HOAs: Secession from or absorbtion into municipalities?).

 Here’s how to secede, without another Civil War, using the openly accepted and state supported legal scheme of homeowners associations: 

 
1.  Create a nonprofit corporation to govern the territory of Texas:  The Peoples Republic of Texians.  Appoint a board of directors.
2.  Have the entire territory be subject to CC&Rs by the simple act of living within Texas, and remaining there.
3.  Grant the People’s Republic authority under the Texas Property Owners Act.
4.  The Texas Constitution  and government remain in place, but with the legislature and executive reduced to puppets.  The real power, as with the usual local HOA, resides in the HOA board and its “constitution”; namely, the Peoples Board or Commission and the CC&Rs.

Judicial integrity: support Constitutional protections or the New America of HOAs

It was not with a light heart or some desire for revenge that I filed a complaint against Maricopa County Superior Court Judge McMurdie for his conduct subsequent to his default decision in Phoenix Townhouse HOA v. AZ Off. Admin. Hearings [OAH], LC 2008-000740 — the decision holding the statute that allowed for the OAH adjudication of HOA disputes to be unconstitutional. Judge McMurdie’s Minute Entry Order of March 2, 2009 struck from the records my letter of new facts to him, containing legal filings as supporting documents, and also ordered the Clerk not to accept any further materials from me. My earlier attempt to intervene on behalf of all homeowners living in homeowners associations, who are affected by the decision, was also denied without explanation.

The conduct of Judge McMurdie was so egregious a violation of his judicial duties as a public servant that it raises the question of the integrity of the court and its obligation to do justice under the laws of Arizona.  This incredible “gag” order by McMurdie violates the overall intent and purpose of the Code of Judicial Conduct “that judges, individually and collectively, must respect and honor the judicial office as a public trust” (Preamble), that “a judge shall uphold the integrity and independence of the judiciary” (§1), and that “a judge shall perform, the duties of Judicial Office impartially and diligently” (§3B).

The statute  attempted to provide an attainable degree of due process and a fair trial for homeowners by means of the independent OAH tribunal. A decision where the Attorney General, attorney for the state agencies, reversed its involvement from filing a brief in support of the statute to one of no longer interested. Where the Legislature also refused to participate and defend the two year-old statute. And where the alleged defendants and real parties in interest, the OAH Petitioner, also failed to respond.

The conduct of the judge must be given “heightened scrutiny” as deserving an issue of statute constitutionality. The role of an independent judiciary in the separation of powers doctrine, which was the heart of the issue before the court, was upheld by the court in its denial of OAH adjudication. Yet, my attempts to obtain justice were summarily dismissed without an explanation or a justification. Was the Court acting independently?

It is inconceivable that my submitted information would be summarily dismissed, kept from the public, not acted upon — in short, a “gag” order — and the default decision allowed to stand. A decision that would be declared void ab initio (from the beginning) based on my submitted materials, and where Judge McMurdie had the power to so act under Ariz. R. Civ. P. 60(c): “This rule does not limit the power of a court to entertain an independent action to relieve a party from judgment, order . . . or to set aside a judgment for fraud upon the court.”

For the Court to do justice and maintain its integrity, my “letter of fact” and supporting materials must be made part of the case. There must be transparency if the judiciary is to justify its claim to independence in upholding the laws of the land.

The Florida HOA Battleground (HB 1397): police powers and the loss of fundamental rights

This session must decide on Rep. Robaina’s, the homeowner rights champion, omnibus or “all-inclusive” Community Associations reform bill, HB 1397, with its 190 pages of reforms. (The first 12 and a-half pages just summarize the changes). The bill attempts to deal with both the broader issues of the application of democratic principles and the use of police powers to regulate the acts and actions of HOA governance — requiring necessary actions while prohibiting others. State police power is often used to protect a weaker faction (segment or part of society) from a stronger faction.

HB 1397 jumps right into the application of Florida’s police powers, permitted under the “establish justice”, “insure domestic tranquility”, and “promote the general welfare” objectives of the US Constitution. The bill begins with an addition of subsection (10) to § 20.165, Dept. of Business and Professional Regulation, that adds strong enforcement authority to employees of DBPR, such as to arrest, carry firearms, issue court subpoenas, etc. HB 1397 provides for very strong and very necessary enforcement authority if Florida laws are to have any meaning and standing as a bona fide law instead of a mockery of justice. There are also protections against home invasion by HOA officials and agents (§ 718.111(5)), paralleling that protection already provided to homeowners not living in HOAs by the 4th and 14th Amendments to the US Constitution. These reforms, alone, restore lost rights and freedoms enjoyed by non-HOA residents, and reduce the second-class citizenship of HOA residents. The New America of HOA-land special laws and “constitutions” protected by the state must cease! Rep. Robaina’s bill goes a long way to restore the America of our Founding Fathers being quietly encroached by HOA-land special interests.

The second aspect to HOA reform legislation that concerns the systemic, the very structure of the legal scheme, failings and repudiations of American democracy. While the ends of the homeowner association mandatory governance of subdivisions are desirable in certain respects, the means to achieve these ends have been a disgraceful repudiation of the principles and values of the US Constitution with its concern for the protection of individual rights and freedoms. The very legal scheme or concept of homeowner associations flies in the face of the Constitution and has been defended by the weak argument of voluntary agreement to the loss of individual rights and freedoms by the simple argument, “Well, they still live there, don’t they?”

There are questions of appropriate due process protections that only say “after notice and an opportunity to be heard” fines may be imposed by the board, without explicitly requiring an independent tribunal where witnesses and evidence can be question by the homeowner. And there are questions of “fair elections” procedures, of the need for free speech and access to all relevant information necessary to protect the homeowner from abusive actions by the board, of unusual punishment over miniscule unpaid assessments in terms of the greater loss suffered by foreclosure, where the HOA has not advanced any funds like the mortgage company (which is ascribing public government attributes to the private HOA entity), etc. How can a homeowner file fraud charges, as an example, when access to records is denied and not enforced by statute?

Analyzing a bill of the magnitude of HB 1397 places burdens upon the average homeowner with limited time and resources as opposed to the hired-hand, paid lobbyists of the special interest groups. Homeowners must understand that HB 1397 will be the result, for all practical matters, of a compromise between opposing parties, and the decision to support the bill must so accept this reality of governance. It will be a question of “pluses and minuses.” Trade-offs will be made, but each must be weighed against the balancing scale of justice for the people, first and foremost. Rep. Robaina’s bill is a must! Once passed into law, “blemishes” can be adjusted and will subject to the democratic process of give and take between the homeowners themselves, and between homeowners and the special interests.