HOA Constitutional Government

Our brave men and women, our sons and daughters, are sent to Iraq and elsewhere to promote and establish a form of democracy that is rapidly eroding in America, being replaced by independent principalities and city-states across this country.  They are more commonly known as HOAs.  The future foretells that these brave soldiers, and their children, will live in an authoritarian local government lacking in the protection of their fundamental rights and freedoms.  Some will die for this New America.

Let’s look at the astonishing population statistics (in millions). 

year       US       HOA     %

1970       205       2.1          1.0

1980       227       9.6          4.2

1990       249     29.6         11.9

2000       281     45.6         16.1

If we add on half the 1990 – 2000 HOA resident growth rate, 25%, that makes the 2005 HOA population about 56.5 million, or 18.8%. It was announced in 2006 that our largest minorities accounted for:

Hispanics:        14.8% of population;  Blacks:            13.8%

Yet, state legislators have continued to oppose constitutional reforms while mandating more and more of these private governments, these independent city-states, these principalities, operating outside the US Constitution.  The popular defense of HOAs is the argument that homebuyers voluntarily agreed to this loss of their rights, and that they were fully informed of all material factors affecting their decisions, rings hollow when such information is not part of any promotional advertising. 

Furthermore, there are no government web pages in any state informing buyers of all the consequences of HOA living and their loss of their “guaranteed” rights.  An example of the failure to warn and advise homebuyers — much as is required when people seek to buy IPO stocks, those RED Herring prospectuses with capitalized, bold, red lettering — can be found on the Constitutional Local Government website under “10 myths About HOAs“. 

Why is this “see no evil, hear no evil, speak no evil” allowed to happen? What are our state governments afraid of?  Let there be freedom of choice, not suppression! This unspoken agreement, this conspiracy of silence, remains the policy of our supposedly democratic state governments where individual liberties and freedoms are expected to come first. 

Yet, our brave men and women go forth in defense of this New America, this United HOAs of America.  (Robert H. Nelson in his 2005 book, Private Neighborhoods, speaks of HOAs eventually replacing local municipalities).

Our federal government should look to ending this spread of undemocratic governments within America!  All the 2008 candidates ought to have the immediate reform of HOA governance on their agendas.

TO:  Arizona Mayors of Chandler, Gilbert, Glendale, Mesa, Peoria and Surprise 

 

In keeping with your stated objective of educating homeowners about HOAs, the following is important information that I hope you disseminate. It’s my reply to Monday’s local NBC 12News segment on HOA Academies that your municipality supports.

 

What was the real purpose of this segment on disputes with its 1 minute recounting of the murder of HOA board members by a victim?  To educate or to create fear and distrust of those neighbors living next to you in your HOA? 

Why did NBC’s 12News show about 1 minute of Richard Glassel in prison uniform with a victim of the shooting recounting the 7 year-old incident?  To educate or to create fear?  The segment did not mention the CAI member and lobbyist attorney’s claim to $10,000 in legal fees sent to the Glassel’s as intimidation (the Ekmark law firm was not the attorney for the Glassels). The judge, in this simple injunction case leading to the shooting, scolded this law firm (two attorneys make frequent appearances at the legislature and in the media for HOAs) about such an outrageous fee and reduced it to $1,000.

 Why didn’t 12News identify the interviewed attorney, Mathew Meaker, as an employee of the CAI member law firm of Ekmark & Ekmark, whose owner is the AZ CAI lobbyist and past president?

Explaining the Academy seminars, the segment stated,

 

“Some Valley cities offer “HOA academies”, seminars that usually meet once a week for a few weeks, to educate HOA members on the responsibilities they have as homeowners in HOAs. Board members learn how to carry out their roles including enforcement, which often causes disputes and hard feelings.”

 For a balanced presentation, where was the mention of Marie Brown (Ekmark again) or Evelyn Lyles, two very ill women who were subject to foreclosure? (Brown, a 77 year-old with severe heart problems, lost her home; and a forty-ish breast cancer victim Lyles was saved by the efforts of then Mayor Berman. Both died in 2006. Why didn’t it ask if these incidents were what CAI means by, “good people should not be required to pay for deadbeats”?

Do these academies teach the severe restrictions on the liberties and freedoms of homeowners when they buy into an HOA. Information definitely material to a fully informed and consensual agreement.  Information not found on any government web site — including the cities sponsoring these academies — or in the sales and promotional materials of the developers or CAI trade group.  Or is it the aim of these city supported academies simply: “how to be happy in a mandated and repressive HOA and like it”?  You can read my “10 Myths About HOAs” as a starter for a balanced presentation.

 

Why wasn’t it mentioned that over 50% of the OAH cases were won by the homeowners? Or that the homeowner can get justice for the bargain price of $550 or $2,000 while over 78% of OAH cases require no filing fees?  Why not?  I’ll be very happy to share my summaries as educational examples of adjudication as real guidance for all involved.

 

Why did NBC mention the solar panels bill, and not the homestead exemption bill vetoed by the Governor or the fair market value foreclosure sales bill still pending?

 

Why weren’t the “teachers” at these academies named? Was it because they may be the very same business trade, national lobbying group that opposed substantive legislation before the legislature every year in support of HOAs alone? 

 This was an HOA biased and irresponsible echoing of the HOA proponents’ propaganda, not an attempt to educate the homeowners.  Perhaps NBC should listen to those phone calls and emails that I receive and the reaction by the homeowners when they are told the truth about the hopelessness of their position: that the state supports and promotes the existing unjust HOA environment. Typically, their response is, “This is wrong. I wasn’t aware”.  

 

It is a long established legal doctrine that legislation is presumed to be constitutional.  That is, a citizen must file suit with convincing evidence that the legislation is clearly unconstitutional.  And, our federal and state constitutions do not grant this power and right to declare legislation unconstitutional to any state governor.

In Arizona, SB1330 would have restored the homestead exemption to homeowners living in HOAs, removed by industry-supported legislation in 1996. Advocates argue that the 1996 law is unconstitutional since it reflected an intrusion into private agreements by the government, and it created a second-class citizenship since it removed the right to a homestead exemption that was granted to all homeowners long ago.

CAI, however, made the same argument of contractual interference not against their 1996 legislation, but against this bill and in opposition of righting wrongs of the past, and that any agreement was free from state intervention.

In conclusion, SB1330 is unconstitutional as it would impair the contracts that create consensual lien rights in communities that are governed by CC&Rs that create liens. (AZ CAI Call for Action email.) 

 Much to the shock and dismay of homeowner rights advocates, Arizona Governor Napolitano also entered the constitutionality debate and vetoed the bill on her version of constitutionality: “Today I vetoed Senate Bill 1330, which dealt with a variety of unrelated subjects. . . . This bill violates the single subject rule.” 

The Governor’s justification is based on a simple statement in the AZ Constitution. Let’s subject this requirement to “judicial review”, seeking the intent of this Art 4, Part 2, § 13 of the constitution. Section 13 reads,

Every act [bill] shall embrace but one subject and matters properly connected therewith, which subject shall be expressed in the title; but if any subject shall be embraced in an act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be embraced in the title. 

The AZ Legislature relies on Mason’s Legislative Manual, which is a legislature version of Roberts Rules of Order for guidance in fundamental legislative procedure.  Sec. 729 of Mason’s pertains to “Titles to Legislation.”  Mason states, in subsection 2, that the fact that there may be some “discrepancies or irregularities in the title . . . will not invalidate the legislation as long as there is no question of identity . . . .”  Subsection 3 adds quite clearly that, “when the object of an act [bill] is fully expressed in the title, the form or status . . . is immaterial.”

I can recall several CAI sponsored bills in past years that, more so than SB1330, amended 5 sections of Ch 9 and Ch 16, pertaining to HOAs and Condos, especially HB2154 signed by the very same Governor in 2005.  Both bills dealt with amendments to the Condominium and Planned Communities Acts. What is different about SB1330 from HB2154?  Does the Governor realize that she has played into the hands of the national trade group lobbyist for HOAs, CAI, that has been arguing that the bill is unconstitutional? 

 

Furthermore, the constitution does not grant powers to the Governor to declare legislation unconstitutional. That’s the well-founded role of the judiciary.  Perhaps it was her awareness that the courts hold all legislation to be constitutional, and that she sees it another way.  Or, some lobbying group convinced her that it was unconstitutional. Yes, she can veto a bill, but her justification for her veto of SB1330 raises eyebrows! The Governor is putting the burden on the Legislature to override her presumption of unconstitutionality, and her veto reflects a “see no evil” in the 1996 statute.

Yes, § 13 of the AZ constitution does say one subject, and yes, the Governor can veto bills. But in view of the historical intent and purpose of such a restriction the decision by the Governor to veto SB1330 is highly unreasonable and out of order.  The Governor needs to provide her real reason for her veto of this bill that attempts to correct an unconstitutional interference in private contracts, and an unequal application of the laws, by industry sponsored legislation in 1996. 

This is a sad day for Arizona, and a sad day for Governor Napolitano. 

The following introductory paragraphs are from a paper sent to my attention by a PA HOA treasurer, since May 2006, who decided to educate himself about HOAs.  Excellent reading.  The complete 8-page paper can be found on my site at Treasurer.

 

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My Name is Robert Metcalf. I currently reside in, and serve on the Board Of Directors for a Common Interest Development (CID) known as Concord Crossing, located in Chadds Ford, PA. When I began my term in May of 2006, I decided to educate myself concerning CIDs to enhance my performance as a board member. Frankly, what I learned shocked and scared me. The purpose of this paper is to illustrate and provide some possible remedies to what I perceive as the greatest injustice perpetrated upon the American citizen in history.

 The Root Problem 

There are two basic issues concerning CIDs:

·         The basic legal framework in which they operate.

·         The lack disclosure required by law for perspective buyers.

As American citizens most of us take for granted the responsibilities and protections provided for us in our laws. It is unfortunate however that a sizable part of us have had these rights and protections stripped away without being afforded the opportunity to really understand what it means to purchase a property in a CID.

   Arizona bill, SB 1330, restores the homestead exemption to homeowners living in HOAs, taken by a 1996 statutory lien that offered no legitimate justification for classifying these persons as second-class citizens.  It passed the Senate’s Final vote 19 – 7- 4 in spite of heavy and irrational arguments by the national lobbying organziation that opposes the extension of constitutional protections, the Community Associations Institute, CAI.

CAI has resorted to a socially irresponsible position that homeowners in HOAs should look to their own pocketbooks and not to a greater responsibility as a vibrant and productive community that is part of the municipality and the state. Its cry that “It’s not fair to pay for deadbeats” reflects a view that peope should not pay taxes because they do not like some of the programs that are paid for by their taxes.

Congratulations to the Arizona Legislature for twice supporting substantive HOA reforms in support of the state and US constitutions.  Last year, the legislature approved a due process bill that provided for an independent adjudication of disputes with HOAs, using the Office of Administrative Hearings under the state’s Administrative Procedures Act.