HOA Constitutional Government

Advocates are all aware of the silence by the media to deal with the serious issue of why we are having all these problems with homeowner associations, HOAs, across the country. The media, when it does speak up, usually talks of isolated local incidents of “this problem with that HOA”, and with a “isn’t that terrible” approach, period.   Such presentations may evoke shock and surprise from their reader/viewers, but are quickly dismissed with a, “Hey hon, what’s for supper?”  This type of news coverage, especially those conducted by investigative reporters, has failed to have any impact on government officials and public interest firms.

Several reporters have made an attempt to deal with solutions to these problems, echoing the all too familiar Community Associations Institute (CAI) ploy, “These homeowners do not come up with any solutions to their problems”. And the media has failed miserably to ask the obvious logical first question needed to be answered:  “What are the causes of these problems?”  

Advocates know all too well that CAI leads reporters in the direction of, “if only those homeowners would be more involved in their HOA and follow the rules that they agreed to” as the cause and solution to HOA problems.  Reporters repeatedly failed to ask about the adhesion contract nature of CC&Rs, the biased state laws in favor of HOAs that strip homeowner rights, and the failure to disclose, especially from state agencies and sales organizations, what real living in HOAs is like.

Homeowners with legitimate complaints are trivialized by CAI, and in the media when it echoes the CAI propaganda, with comments of  “a handful of trouble makers” (it used to be “malcontents”).  The media has failed to investigate and report on the well documented legal authorities supporting homeowner complaints, as witnessed in the NJ Supreme Court Twin River case. And to look beyond the isolated incidents are acknowledge the extent of the factual basis of the problems across the country, realizing that these complaints are very similar and are not isolated events.

The media has remained all too silent on asking these causation questions and looking for answers, including the recognized national leaders who have already conducted stories or interviews on HOA problems, some of which include  ABC’s 20/20, The NY Times, The Washington Post, CNN, and the LA Times. The media has failed in its responsibility to the people who, in a democratic country, must be fully informed and educated about serious issues.  HOA abuse is serious.  There are an estimated 18.8% of the population living in HOAs today, a percentage large than either the Black or Hispanic minority groups (based on CAI and Census Bureau data). 

New York Times Best Selling Author Stephen Hayes, in his recently released book on VP Cheney, writes about a NY Times executive editor who wrote Cheney in an effort to get the VP to talk to reporters.  This quote applies to HOA problems as well, and the need to get answers to the causes of the problems that continue to exist for over 40 years. (CAI was formed in 1973 to deal with problems resulting from the mass marketing of planned communities as set forth in the 1964 ULI publication, The Holmes Association Handbook).  Hayes writes of the editor’s email,

“Our job is not to ‘support’ our leaders, not to buy in to any administration . . . but our job should be to figure out what they believe and why, and how all of that shapes the policies they make.  We are obliged to get past the labels and slogans.” 

Some advocates have cautioned me about antagonizing the media, least they turn against us or refuse to conduct further stories.  I answered with, “I do not believe that the national media leadership has fallen subject to money influences and threats, as portrayed in the movie about the tobacco revelations on nicotine, The Insider, and has lost its moral and ethical compass.  As portrayed in the above quote, the media leadership fully understands the course it must set and maintain for itself. 

It’s past the time for the media to investigate the causes of these HOA problems, and the role played by the national lobbying organization, CAI.  Only by means of a public discourse, lead by the media, will the causes of these endless homeowner association problems be uncovered.

Some 5 years ago I began writing that advocates must make fundamental constitutional principles the backbone of their arguments for HOA reforms.  Today, with the NJ Supreme Court opinion that HOAs are voluntarily and willfully agreed to private business contracts, a major blow has been struck against constitutional protections.   The court stated that these private contracts create benefits for the communal living nature of HOAs. The court also held that other methods and devices, namely the business judgment rule where the relationship between homeowners and boards is not one of citizen to elected representative as we are accustomed to with public government, but as business management to stockholder. 

Today, when other state legislators and courts adopt this decision, advocates will be facing even tougher challenges to fair and equal treatment under law, since the NJ court said that these rights can be given away without applying the judicial review doctrine of appropriate due process as required under constitutional law.  The court re-affirmed that private contracts relating to private HOA governance by means of restrictive covenants are off-limits to any government oversight or regulation. This legitimate exercise of police powers for the general welfare is characterized by CAI as government interference with the will of the people.  In other words, laws that regulate, restrict or prohibit certain acts in a contract, such as truth in lending, truth in advertising, fair housing, etc have no application with respect to HOA covenants, thus creating independent city-states or principalities with laws unto themselves only. In other words, the court asserted that equitable servitudes, covenant contracts, trump our Constitutional rights, thereby establishing a New America not of our Founding Fathers, but one superior in law to the US Constitution.

The doors are open for any person or organization seeking to escape being subjected to the US and state constitutions has been provided with a mechanism to avoid the laws of the land — form a planned community with an HOA government.  Covenants can restrict the use of the land beyond what we see with public zoning policies, and by some third-party, profit-seeking developer who is long gone after the development is complete.  With planned communities, there is no need for voting and approval of charters by the affected citizens, as required for incorporated villages, towns or for cities under state laws.  No, the “state”, now being the private HOA government, assisted and supported by the public government, dictates these laws of the land, which include defective democratic procedures and processes incapable of providing genuine democratic governance — the corporate business form of government.

Community Associations Institute, CAI, made its choice long ago, and has re-affirmed its position with respect to its opposition to the protection of homeowner fundamental rights and freedoms, and its opposition to the application of the US Constitution and Bill of Rights to HOAs.  CAI also actively supports and promotes the Uniform Common Interest Ownership, UCIOA, that has always lacked a bill of rights and other protections of homeowner rights.  In fact, UCIOA itself carries the recognition that these oppressive UCIOA laws sanctifying HOA covenants may be judged as an adhesion contract. Section 1-112 of the 1994 final model addresses how courts are to determine whether or not declarations are indeed adhesion contracts.

CAI repeatedly makes the misleading argument that “the voice of the people” constitutes the essential ingredient of our democracy. CAI president and attorney, Ronald Perl, comments on the Twin Rivers decision in a recent CAI eRelease that,

“with this decision, homeowners can continue to govern their own communities by mutual consent and continue to enjoy the self-determination and quality of life they have come to enjoy.”

History and our Founding Fathers realized the fallacy of the “will of the people” as the guiding principle of a democracy and established controls on our government making government responsible to the people.  That is why we have checks and balances, and a separation of powers, and a bill of rights.   The Preamble to the US Bill of Rights reads,

THE Conventions of a number of the States having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best insure the beneficent ends of its institution

 None of these protections for the people against the power of government is present in HOA constitutions, those developer written CC&Rs.  While speaking of the will of the local community, CAI is the leading national organization promoting top-down state laws controlling and regulating how these so-called democratic local communities are to function.  Your CC&RS and state laws, especially the UCIOA model, are derived from the seminal publication on the mass marketing, legal status and defining structure of planned communities and HOAs — the 1964 Urban Land Institute’s Holmes Association Handbook, TB #50. 

It establishes not a democracy in action, but a private organization, secure from the constitutional restrictions imposed on public government, and imposes by means of state laws an authoritarian governance over what was once a free and independent people under our Constitution.  

The courts and legislatures are creating this New America by ignoring, reinterpreting and reinventing our constitution.  In an attempt to reassure the American people, the NJ Supreme Court wrote,

 

Finally, residents are protected under traditional principles of property law . . . One owning a tract of land may convey a portion of it, and by appropriate covenant or agreement may lawfully restrict the use of the part conveyed for the benefit of the unsold portion, providing that the nature of the restricted use is not contrary to principles of public policy. . . . that “[r]estrictions in a master deed” should be enforced “unless those provisions ‘are wholly arbitrary in their application, in violation of public policy, or that they abrogate some fundamental constitutional right’”

 Still, in spite of all the above justifications, guarantees and assurances that homeowners are protected by our system of government, and by implication, the courts, the NJ Justices decided:

 

In applying the Schmid/Coalition multifaceted standard, the twin Rivers Homeowners’ Association’s policies, as set forth in its rules and regulations, do not violate the New Jersey constitutional guarantees of free expression.

Only the people can stop this authoritarian, regimented, communal form of living under HOA governments.  Wake up America and see the Emperor’s New Clothes for what they really are – a calculated scheme for a New America.
  

Homeowners’ association case: Mixed decision

NJ Voices (njvoices.com) Frank Askin

Residents of homeowners’ associations seeking free speech rights within their communities lost the immediate battles but may have won the war in the decision issued yesterday by the New Jersey Supreme Court in the Twin Rivers case.

In the most significant sentence in the obtuse 37-page opinion, the Court said that the more than one million residents of common-interest communities in New Jersey may “successfully seek constitutional redress against a governing association that unreasonably infringes their free speech rights.”

It is the first state high court in the country to rule that private homeowner associations may be subject to the free-speech provisions of a state constitution.

Of the three Twin Rivers regulations challenged in the case, the Court held that they were reasonable restrictions on residents’ rights, but not before rewriting one of them — the sign-posting rule — to make it more free-speech friendly.On that part of the case, the Court upheld a regulation that it said allowed homeowners to post a political sign in every window of their home.However, when the case was first brought, the regulation allowed only one sign per property – either in a flower bed adjoining the house or in a window. The trial court had misread the regulation to allow a sign in every window.

In adopting that interpretation of the rule, the Supreme Court said that it was not unreasonable, warning that “any restrictions on the exercise of [free speech] rights must be reasonable as to time, place and manner.”

The other regulations upheld involved restrictions on access for opposing views in the community newspaper and an allegedly excessive fee for rental of the community room.

The Court held that in light of the many alternative channels for communication available to Twin Rivers residents, the challenged rules were reasonable time, place and manner regulations.

Unlike, many common-interest communities, Twin Rivers allows residents to “walk through the neighborhood, ring the doorbells of their neighbors and advance their views.” The Court noted that the Twin Rivers plaintiffs had even distributed their own newspaper without interference.

This discussion in the opinion should give pause to the hundreds of other community associations in New Jersey which try to forbid contact among residents by prohibiting door-to-door solicitations and petition gathering. On the other hand, homeowners will be disappointed that the Supreme Court declined to find that homeowner associations themselves are “constitutional entities” more fully susceptible to the constraints of the State Constitution – as it found as to the state’s ubiquitous regional shopping malls in an earlier case.For the moment, the only constitutional provisions applicable appear to be the free speech/communication provisions of Article I. Although In a rather ambiguous section of the opinion, the Court does note that the private dwellings of residents are also protected “under due process standards from untoward interference with or confiscatory restrictions upon its reasonable use.” Only time will tell how that particular principle will be applied.

But in the meantime, the homeowners boards and management associations which were aligned on the side of the Twin Rivers Association should hold their applause at the outcome of the case.

(In the name of full disclosure, it should be noted that the writer was counsel for the Plaintiffs in the Twin Rivers case.)  

Why do all of these state disclosures fail to make the following important facts clear to all buyers?  Why does CAI, attorneys and management firms, and developers, all  fail to disclose facts material to the decision to buy????  Why is there this unspoken alliance, this conspiracy of silence?

Source (complete email can be found at CAI): 

[CAIerelease] New Jersey Supreme Court Sides with Associations, 07/26/2007
Date: Thu, 26 Jul 2007 13:51:46 -0700 (PDT)
From: frathbun@caionline.org

“We are pleased that the court has disallowed intrusive government interference in the rights of private homeowners,” said Ronald L. Perl, president of Community Associations Institute (CAI), a national membership organization dedicated to fostering vibrant, competent, harmonious common-interest communities. “With this decision, homeowners can continue to govern their own communities by mutual consent and continue to enjoy the self-determination and quality of life they have come to enjoy.”

Community associations are private entities and historically not subject to the same constitutional standards as government.  Although this distinction is supported by decades of case law and the practicalities of common-interest housing, the earlier appeals court ruling had the potential to blur this line.

The decision clearly defines associations as businesses and respects the private, contractual agreements among homeowners who share the same expectations of home ownership.”

Source:[CAIerelease] New Jersey Supreme Court Sides with Associations, 07/26/2007
Date: Thu, 26 Jul 2007 13:51:46 -0700 (PDT)
From: frathbun@caionline.org ####

For more information on the mass merchandising of homeowners associations and the role of CAI as the national lobbying organization promoting and influencing state legislatures to deny homeowners constitutional rights, see The Truth.  You can also search on this blog under “mass” to view eEditorials on this important topic.

To this non-lawyer, homeowner rights activist, the New Jersey Supreme Court’s opinion in the Twin Rivers HOA case was another instance, like the US SC Kelo decision on eminent domain (Kelo v. City of New London, No. 04–108. (2005)), of further establishing and legitimatizing the NEW AMERICA dominated by planned communities and homeowners associations.

The court wrote:

“Finally, residents are protected under traditional principles of property law . . . One owning a tract of land may convey a portion of it, and by appropriate covenant or agreement may lawfully restrict the use of the part conveyed for the benefit of the unsold portion, providing that the nature of the restricted use is not contrary to principles of public policy. . . . that “[r]estrictions in a master deed” should be enforced “unless those provisions ‘are wholly arbitrary in their application, in violation of public policy, or that they abrogate some fundamental constitutional right’”

Still, in spite of all the above justifications, guarantees and assurances that homeowners are protected by our system of government, and by implication, the courts, the NJ Justices decided:

“In applying the Schmid/Coalition multifaceted standard, the twin Rivers Homeowners’ Association’s policies, as set forth in its rules and regulations, do not violate the New Jersey constitutional guarantees of free expression.”

Read the complete statement on this opinion at Twin Rivers.