HOA Constitutional Government

Arizona’s milestone achievement of providing an independent tribunal to adjudicate homeowners complaints against their HOA just hit a brick wall.  After four attempts by CAI member attorneys, a superior court ruling was obtained, by default, declaring the statute unconstitutional.  A violation of the separation of powers had occurred, the trial judge ruled.  He enjoined the Arizona Office of Administrative Hearings from hearing any new petitions and to cease hearing any current cases.

An excellent commentary on this sad day for justice in America can be found on the Arizona HOA Case Reviews blog, and reading the entries for “Examining . . . ” and “Alert . . . ”  Each has several exchanges of comments between readers and the attorney for the HOA.

This constitutional challenge was decided by default when the Attorney General’s office, the agency’s lawyer, declined to get involved.  The OAH and DFBLS were the defendants with the homeowner classified as the “real party in interest.”  What a disgraceful action by the AG’s office, especially when it had previously filed a brief, in the underlying case, in support of constitutionality.

Furthermore, the Arizona Legislature also took a “Who, me?” position and did nothing in support of the statute.

Background informatioin can be found by simplying doing a search on “OAH” at the blog site.

Arizona’s milestone achievement of providing an independent tribunal to adjudicate homeowners complaints against their HOA just hit a brick wall.  After four attempts by CAI member attorneys, a superior court ruling was obtained, by default, declaring the statute unconstitutional.  A violation of the separation of powers had occurred, the trial judge ruled.  He enjoined the Arizona Office of Administrative Hearings from hearing any new petitions and to cease hearing any current cases.

An excellent commentary on this sad day for justice in America can be found on the Arizona HOA Case Reviews blog, and reading the entries for “Examining . . . ” and “Alert . . . ”  Each has several exchanges of comments between readers and the attorney for the HOA.

This constitutional challenge was decided by default when the Attorney General’s office, the agency’s lawyer, declined to get involved.  The OAH and DFBLS were the defendants with the homeowner classified as the “real party in interest.”  What a disgraceful action by the AG’s office, especially when it had previously filed a brief, in the underlying case, in support of constitutionality.

Furthermore, the Arizona Legislature also took a “Who, me?” position and did nothing in support of the statute.

Background informatioin can be found by simplying doing a search on “OAH” at the blog site.

Developments concerning HOA reforms in three state legislatures portend an end to the 222 year American Experiment in democratic self-rule.  The California Law Review Commission had recommended a total rewrite of California’s HOA (CID) act with a blank “Member Bill of Rights.”  The bill was withdrawn not because of the absence of this empty chapter, but because the special interests had some “technical concerns.”   The Commonwealth of Virginia Senate has before it a bill, SB1489, to remove the voting rights of members, rights specified in the binding agreement of the declarations.  The Arizona House has before it a bill, HB2434,  that will impose a uniform quorum requirement that will permit only 20% of those voting, not  of the total membership, to amendment the declaration.  What happened to CAI’s repeated cries that the “will of the majority” is the democratic way?

And behind each one of these bills is the hand of the national lobbying organization, Community Associations Institute (CAI), a tax exempt business trade organization whose objective is to support its members, the vendors of services to HOAs.  It does not have, nor is allowed to have a business trade group, homeowner associations as members!   Yet it dares to declare that it represents the homeowners as well as HOAs before governmental bodies.  The majority of its members and those on the ruling Board of Trustees are attorneys and management firms.  Attorneys do not make money from happy, harmonious, and vibrant communities.  Management firms do not make money from educated, knowledgeable and competent boards of directors.

Yet, state legislatures do not see any problems with this harsh reality.  In fact, Florida and Virginia have chosen CAI to educate HOA property managers as part of their certification requirements.  CAI lawyers hold seminars on how to live under unjust pro-HOA laws and CC&Rs that deny the people their rights and freedoms, and CAI trained management firms run the HOA as the de facto board of directors.  CAI has legislative action committees (LAC) in almost every one of its state chapters to influence legislation, as indicated above.  These LACs will argue that HOAs are a business; that they are private contractual arrangements; that they have been freely agreed to with full knowledge by the homebuyers; and yet demand and seek the same privileges and immunities of public government without the restrictions on and penalties for violations to which public government is held. The particular argument that is made depends on  the intent of the CAI legislation at hand.

Those who have been involved in homeowner rights reforms over the years well understand that CAI has failed to attain its goals to educate HOA boards over its 36 years of existence.  It was formed to make the planned community legal scheme, with its mandatory membership and compulsory dues,  work without serious problems.  However, in 1992 it abandoned this mission for one of self-preservation and became a business trade organization for the income benefit of its membership.  (See Part II, The Foundations of Homeowners Associations and the New America).  CAI has opposed the extension of constitutional protections for members (see its amicus brief to the NJ appellate court in the Twin Rivers free speech case of 2007).

This current movement against the rights of members to vote stands out as a stark about-face to CAI’s  repeated argument that HOAs are democratic because the members can vote.  Has CAI suddenly forsaken its one and only claim that HOAs are democratic because the declarations contain a right to vote covenant?  Perhaps CAI has never really believed in local democracy and HOAs as the voice of the people.  This current movement reflects its stated Public Policy position that supports the imposition of top-down uniform laws, pure government regulation, regardless of individual community preferences and the will of the membership.  As I suggest, in The Foundations of Homeowners Associations, CAI sees itself as the national super-agency regulating planned communities as a parallel, undemocratic shadow government with its own laws not subject to the Constitution, since the HOAs are intentionally created as equitable servitudes under private contracts. 

I explore this failure of the American Experiment and the rise of independent HOA principalities in Establishing the New America of independent HOA principalities (see New America).  This current movement by CAI to deny member voting rights, to allow a minority to control the majority, is just another effort to establish authoritarian regimes, and reminds me of statements made by WWII fascist dictator, Benito Mussolini,

Fascism combats the whole complex system of democratic ideology, and repudiates it, whether in its theoretical premises or in its practical application. Fascism denies that the majority, by the simple fact that it is a majority, can direct human society; it denies that numbers alone can govern by means of a periodical consultation . . . which can never be . . . universal suffrage….  (Benito Mussolini: What is Fascism, 1932).

Thus understood, Fascism is totalitarian, and the Fascist State . . . interprets, develops, and potentiates the whole life of a people. (Benito Mussolini, 1935, The Doctrine of Fascism, Firenze: Vallecchi Editore, p.14, http://www.publiceye.org/ fascist/corporatism.html).

 The continued spread of independent HOAs promoted by the CAI special interest trade group, and accepted by legislators in every state, is relegating the America of our Founding Fathers to a myth.   There are other existing legal means to attain a manicured, landscaped America that subjects a taxing district alternative to the supreme laws of the land.  Inquiries to my web sites from interested persons in other countries, including third-world countries, have been increasing.  The silence on the part state agencies responsible for consumer protection,  state attorney generals, and from the legislators themselves, only serves to support the legitimacy of the homeowner rights arguments.  One can ask: If all is on the up-and-up with the HOA legal scheme, then why are government entities afraid to tell the public what is going on by publishing advisories, warnings and public information pamphlets?  Where is the “transparency to the public”?

Americans have a choice to make.  Legislators have a choice to make.  Which America lies in our future?  Shall the America of the people, by the people and for the people perish from this earth, replaced by the top-down imposed separate and unequal laws of the fascist leaning HOA?  I hope not!

The America based on the protection of individual rights and freedoms is being replaced, as exemplified by SB 1489 (see Virginia’s HOA bill, SB1489: stands the constitution on its head), by a belief in a New America of independent HOA principalities, which admits to no protections or defense of our cherished rights and freedoms.  The principles, values and beliefs of The Founding Fathers that served as the fundamental ideal of American democracy no longer seem to have relevance, relegating American democracy to that of a myth.

To propose a bill that subverts the voice of the members within a property owners association, or HOA, a voice that is granted under the contractual agreement called the declaration, is shameful.  It violates the Bill of Rights in the Constitution of Virginia, which, in part, holds,

A DECLARATION OF RIGHTS made by the good people of Virginia in the exercise of their sovereign powers, which rights do pertain to them and their posterity, as the basis and foundation of government.

Section 1. Equality and rights of men.

That all men are by nature equally free and independent and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity.

Section 11. Due process of law; obligation of contracts; taking of private property; prohibited discrimination; jury trial in civil cases.

That no person shall be deprived of his life, liberty, or property without due process of law; that the General Assembly shall not pass any law impairing the obligation of contracts . . . .

It is a very disturbing realization that these principles and values do not even get lip-service in today’s political environment.  And to think that the Virginia Constitution had served, in part, as a model for the US Constitution.

It is very disturbing to find that the impetus for SB1489, a resurrection of a defeated SB 6016, was introduced as a result of an attorney who is a member of the national lobbyist for HOAs, Community Associations Institute (CAI).  This attorney is an intervener (a third party with an interest in the outcome) in a case before the Virginia court.  As the plaintiff’s attorney stated, and which is obvious to any informed reader, the bill is an overly broad response that opens the door to other potential actions by an HOA board.  The bill would destroy any vestige of democratic functioning in the HOA, and deny the clearly stated provision in the contractual declaration that requires a vote of the members to amend the declaration. (See my Commentary link above for a more detailed analysis of this bill).

In fact, the CAI attorney made a poorly defined, overly broad assertion before the committee that included, “There is currently no method for reformation in the Commonwealth, and there needs to be a solution for issues where one property owner controls because he has enough votes.”   As I’ve discovered, the modus operandi by many HOA attorneys is the understanding by the attorney that 1) the average homeowner is not knowledgeable in the law, 2) does not have the temperament to undertake a prolonged legal battle, and 3) does not have the funds to do so.  Therefore, we see many of these loosely worded, over-reaching statutes that favor the HOA since the attorneys well understand how to handle statutory challenges in view of the homeowner’s aversion to litigation.

Now just what is this astute attorney trying to say?  Is he saying that some devious person has seized control of the HOA to the detriment of the board, and that the state must help the board to restore order, the status quo?  How can one get legitimate control of the votes?  Well, that’s easy. The HOA board is by far the most common party to use proxies to support its position, and the legitimate use of proxies may be interpreted as “control the votes”. 

The other legitimate control of the votes usually comes from the developer who has not yet turned over the HOA to the membership, and is permitted under the declaration to have a favorable weighted voting mechanism in its favor.  So, what is this astute lawyer trying to say?

It can only be, as stated in my prior Commentary above, to impose the board’s will on a recalcitrant membership that opposes the board’s goals.  But, isn’t that their right under the declaration, a supposedly sacred agreement as CAI has shouted from the roof-top on many occasions?  Why the flip-flop?   

Furthermore, where is the overwhelming government interest to deny homeowner rights explicitly granted under a private agreement?  And, where is the necessity, not merely convenience, in order to accomplish this unstated government interest to warrant a violation of the US and Virginia constitutions?

This bill seeks government support by means of the courts and opens the door to state action in violation of 42 USC 1983, as it seeks to uphold an act that is clearly dictatorial and decidedly undemocratic.  All that the bill requires in order for a court to rule in the HOA’s favor is simply “a good faith attempt to amend”, period. 

This sponsor of this bill, for a second time, has bowed to the influence of the CAI special interests to stand the Constitution of Virginia on its head. 

The bill must not pass!