April 13, 2008

 

Brian Hebert

California Law Revision Commission

 

Email reply to CLRC email questions (see below) regarding my email letter of April 11, 2008 on AB1921

 

I am surprised at your response to my broad email message that narrowly asks about constitutionality problems.  Perhaps you misunderstood my email letter that indicated several areas that warrant further analysis as to violations of due process and equal protection of the laws, supported by legal authorities.  CLRC, as part of its mission, should become familiar with the homeowner rights resource material references provided to CLRC before drafting any revisions to the laws.  If this is beyond the ability of CLRC, then it should recommend to the legislation that an independent study committee be funded to resolve these important questions and await the outcome.

 

Perhaps the CLRC members should view the video documentaries of the Florida House Select Condo/HOA Committee hearing in Tampa, FL this past Feb. 23^rd.  These excerpts from the hearing demonstrate the committee’s intent to protect homeowner rights by questioning condo boards and attorneys, under subpoena, as to their refusal to comply with the law. Visit the HOAGOV Channel on YouTube at http://youtube.com/hoagov and select the “FL-select” videos. (You will also find other video documentaries including the oral arguments made before the NJ Supreme Court in the Twin Rivers HOA free speech case).

 

My first reaction to your short letter, with its focus on “what constitutional rights”, was a recall of a similar statement contained in Evan McKenzie’s 1994 landmark book, Privatopia:

 

Residents in CIDs commonly fail to understand the difference between a regime based formally on rights, such as American civil governments, and the CID regime, which is based on restrictions.  This often leads to people becoming angry at board meetings and claiming that their “rights” have been violated – rights that they wrongly believe they have in the CID.   This absence of rights has important consequences because the balance of power between individual and private government is reversed. (p. 148).

 

If CLRC missed my message on the failure of the state to protect the rights of citizens, and that of McKenzie, too, allow me to quote the Declaration of Rights: 

 

SECTION 1.  All people are by nature free and independent and have inalienable rights.  Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.  

Do you not agree with my recommendations that AB 1921 explicitly include appropriate parts of the Declaration of Rights?  Of course, CLRC may take the position that all legislation is presumed constitutional, and that the homeowner, indeed, has no rights since it is the state alone that determines what rights he has.  This seems to be the view of homeowner rights adopted by CLRC with its submission of a blank bill of rights chapter, giving rise to CLRC being the gatekeeper to any discussion by the legislature of the just and fair treatment of its citizens. Has CLRC also become the gatekeeper of what affirmations of the California Constitution should become part of Davis-Stirling?  Or the gatekeeper of restricting CC&R covenants and agreements in order to protect the rights of the people to the fair and equal treatment under the law?

 

As to your specific concern about foreclosure, I will indulge your short question with a “for the purpose of clarification” answer, knowing full well that the problems of the CID scheme will not be solved by our short exchange, and should not be.

 

First, what is the state’s interest in allowing CID foreclosures?  It appears to be a “ratification” of the private Declaration agreement, and as such, subject to claims of contract interference.   I am raising the issue of statutes, and not of any private agreement, and why the state has gotten involved.  One thought is that there are problems with this private arrangement and that the state must give its imprimatur and “blessing” in order to protect the private arrangement. If so, then the CID is clothed as a state actor.

 

Second, what funds were exchanged between the homeowner and the CID to warrant this right to foreclose?  The CID has advanced none of its funds, as a bank or mortgage company, in exchange for the home as a security.  Rather, the CID has been positioned as the equivalent of a government entity and allowed to foreclose on the basis of a failure to pay its “taxes”, or assessments that are made to pay for the general services of the CID.  Again, just like a government entity and not a bank.  One could argue special laws, or special privileges and immunities to private organizations, or any of several violations of the Declaration of Rights.

 

Third, let’s consider the ratio between the debts actual owed the CID and the price of the property that is taken from the homeowner.  Very often it exceeds the US Supreme Court’s guidelines of a suggested 10 to 1 ratio for punitive damages in insurance claims, above which may be considered cruel and unusual punishment.  And let’s not get involved with the excessive monies from foreclosure that go to the attorney for the CID and not to help the CID get along and survive.  And let’s not forget that this is not for any repayment of funds advanced by the CID.  And, that the “bonus” money arising from fines and penalties are punitive to hasten payments and a detriment to further failure to pay.  Foreclosure is purely punitive in nature, and has been allowed to be excessive at that!  Is this a fair, just and equal treatment of the homeowner?  Is this good public policy? Or is it state protection of a private organization, and the clothing of the CID as a state actor?

 

Let me repeat. This is not the venue to solve all problems with the CID scheme.  It is, however, for the legislature to act in accordance with the California Constitution. It is for CLRC to recognize the legislature’s duties and obligations under the constitution to protect its citizens, and to provide a balanced bill for proper consideration by the elected representatives of the people. 

 

George K. Staropoli

Citizens for Constitutional Local Government

 

———————————————————-

George,

 

In order to help me better understand your position, would you mind pointing out some specific examples of how an association would violate a member/owner’s constitutional rights? 

 

If the same sort of situation could arise in a landlord/tenant relationship, please explain why the situation would be unconstitutional in an HOA, but constitutional in a simple rental (or if you think it would be unconstitutional in both situations, why that would be). 

 

If the example involves foreclosure, please explain how it is unconstitutional for an HOA to foreclose, but constitutional for a bank to foreclose.

 

Thanks.

 

Brian Hebert 

 

This action by CLRC stands in sharp contrast to the approach taken by our Founding Fathers, although they had their differences, which conditioned the approval of the constitution upon the approval of the Bill of Rights.   This Commission has proposed AB 1921 without even considering, under its empty  “Member Bill of Rights”, the rights and freedoms of California citizens who are subject to the Davis–Stirling Act.

I must repeat the CAI claim, because it’s so unbelievable:  “HOAs are not governments, but are democratic”. (See CAI Ungated blog entry of Apr 2, 20081 and my analysis2).  

 

That’s an oxymoron.  A democracy is a form of government; everybody knows that. Or do they?   Once again we see the Community Associations Institute (CAI) attempting to redefine and distort old concepts and meanings in order to make the authoritarian HOA regime acceptable to the public and to the policy makers.  It won’t work anymore!

 

How can CAI reconcile the above declaration of the HOA legal scheme with its amicus curiae position in the NJ Supreme Court Twin Rivers HOA free speech hearing?  It advised the Court — sounded more like a warning – of (emphasis added), 

 

[T]he unwise extension of constitutional rights to the use of private property by members (as opposed to the public) raises the likelihood that judicial intervention will become the norm, and serve as the preferred mechanism for decision-making, rather than members effectuating change through the democratic process.

 

 

In one fell swoop CAI dismisses the Constitution as the supreme law of the land and substitutes the voice of the people as the only “law” governing HOAs.  CAI seems to be saying that the people can do no wrong.  If HOAs are indeed democratic, to temporarily accept CAI’s argument, then that form of democracy is not the American form of democracy based on the Constitution and Bill of Rights.  Is CAI arguing that there must not be any constraints whatsoever on the voice of the people? And that the judiciary, with its separate powers to watch over violations of the laws and constitutionality, is not necessary?  This will only lead to anarchy.  Or does CAI have some other goal?

 

What is CAI saying here?  Is CAI supporting succession as Nelson writes in his book, Private Neighborhoods and the Transformation of Local Government?  I don’t think so, because CAI is the behind-the-scenes supporter of the adoption of UCIOA, or UCIOA based statutes.  UCIOA is a uniform model act for HOA laws, a top-down imposition of rules and regulations without the voice of the local community being heard at all.  UCIOA lacks the restrictions and protections of individual rights so cherished by the people of America; and redefines the goal of government as the protection of property values, first and foremost.

 

It appears that CAI favors a separation of laws, one for HOAs and one for the ever-shrinking number of others not living in HOAs.  CAI’s goal appears to be the establishment independent city-states, of principalities, within the umbrella of the US all bound under the UCIOA rules for HOAs.  The US is still necessary to be the “glue”, the binding force, to effect UCIOA dominance over this growing segment of the country.  But, “hands-off” HOAs, USA!

 

When will the policy makers and public interest groups begin to take a closer look into the advice that CAI is really offering?

 

 

My first reaction to this unbelievable attempt to distort reality is: “Beware the Jabberwock, my son!”1  In his April 2, 2008 Ungated blog entry, CEO Skiba faithfully follows the Alice in Wonderland perception of homeowners associations, namely, as I’ve written earlier, of “what you see is not what you get”. 

Skiba writes:

Community associations are not governments — many years of legislation and court rulings have established that fact beyond a reasonable doubt. Yet they are clearly democratic in their operations, electing their leadership from among the homeowners on a periodic basis. . . .

. . . .

I for one prefer the democratic principles that have served this country for more than 230 years, as frustrating as the process can sometimes be, rather than the various failed alternatives washed up on history’s shores.

  

“Beware the Jabberwock, my son!” 

First, yes HOAs are indeed de facto governments and are authoritarian regimes that rest upon adhesion contracts and state protective statutes, depriving the people, the homeowners, of their freedoms and liberties under the Constitution.  Any treatise on constitutional law will provide the Supreme Court criteria for state actors (entities that function as if a state entity), which apply to HOAs.  CAI loves to direct readers to that one archaic test of state actors,  that of “public functions” from a 1946 case about company towns.  

Just because you can vote does not make a territory or community a democracy. Ask any who have live under Communist Russia, China, or Cuba where voting is allowed, or those in America who lived under Mayor Daly, Boss Tweed or Huey Long, to name a few.  And I guess Mr. Skiba is not familiar with Robert Dahl’s look into democratic performance. The author sets 5 criteria to measure democratic performance: 1) maintaining a democratic system, 2) protecting fundamental democratic rights, 3) insuring fairness among the citizens, 4) encouraging a democratic consensus, and 5) a democratic system that solves problems.2 

Second,  Mr. Skiba also seems to be short on the principles of the Founding Fathers and the contents of the Constitution, reflecting their distrust of government, that contain checks and balances, a separation of powers, an independent judiciary, and a Bill of Rights to ensure that the people’s rights and freedoms are protected. All are absent in the so-called democratic, corporate form of authoritarian governance called the HOA. 

Mr. Skiba continues further with, 

The solution to that problem is not to replace democracy with tyranny, royalty, or some other form of government, but to work to make the democratic process better and to hold those elected accountable. . . .

 . . . .

I don’t think government should dictate in detail how associations should be run from some far off state capital or even Washington, DC. That would be taking away an associations democratic rights and responsibilities.

This statement is truly unbelievable!  CAI is a strong proponent of UCIOA, that uniform, top-down statutory model to regulate HOAs being promoted in many state legislatures.  UCIOA imposes statutes that permit, among other things, foreclosure; due process before your HOA, biased government without the right to present and question witnesses as required under the Constitution, but absent from private contracts; and the absence of enforcement against HOA violations with appropriate penalties to serve as a deterrent, as is the purpose of criminal laws.  Is this the voice of the local community?  The members of your community? 

And finally, Mr. Skiba must resort to patriotic imagery and sentiment in order to gather support for his lost cause, identifying the author of the following as an attorney and Vietnam vet, 

Democracy is built on the simplest premise that has ever supported a political system, that a majority of the voters will be right more often than they are wrong. The inevitable errors will be corrected by the voters–when they perceive those errors.

The statement is a belief in the system, yet fails to address the important foundations and concerns of  the Founding Fathers with respect to those unalienable rights, you know, the ones that no government can take away, and the rule of the majority.  The dangers of one faction, a clique in today’s terms, dominating another was well known to the Founding Fathers.3  The Founding Fathers addressed the serious abuse majority rule, that of the tyranny of the majority leading to the tyranny of the legislature. The end result being the trampling of those unalienable rights that no government can take away, those rights protected under the first 8 amendments as well as the 9th and 10th amendments.  

And this is one of the most serious defects in the HOA legal scheme as applied to the proper exercise of democratic functions to protect the rights of the minority. The members of the HOA have no such equivalent rights under the HOA “constitution”.  HOAs are a business form of authoritarian governance, as Skiba and other CAI stalwarts have repeated pronounced. Mr. Skiba seems to be “small talking”, oversimplifying the issues, and distorting them and the reality behind HOA governments. They are not democratic at all!  Don’t believe it!  

“Beware the Jabberwock, my son! 

PVTGOV News Video  is a service that provides excerpts from legislative sessions and court videos for viewing of important homeowner rights issues.  See and hear how advocates have been fighting for homeowner rights, and how the courts and legislators have reponded in several states across the country.   Some videos contain commentaries on these developments.

These documentaries are currently available for internet viewing at:

1.  HOAGOV channel on YouTube:  Channel

2.  iReporter HOAGOV at iReport.com (CNN).  Search under “HOA government”. 

3.  StarPub website: Videos