HOA Constitutional Government

The last speaker before the Texas hearing on TUPCA, Oct 2, told the committee, “I will kill myself”, reflecting the pain and anguish of not finding anyone to help her fight the abuse from her HOA board. She had sent emails to Texas legislators to no avail, and now she was before the committee in person.

This homeowner, Arshia, was interviewed by Shu Bartholomew host and producer of On The Commons this past Saturday. Towards the end of the interview, Shu asked what did the legislators say to her after the hearing, in person.

Arhisa said, “That’s what you get when living in an HOA.”

Shu, a bit surprised, asked, “The legislators?”

Arshia replied, “Everybody tells me that.”

Now, this attitude that pervades our society and halls of government reflects a malaise, as one former president referred to the problems with American society. It says that hardworking, decent people seeking to do what is right and follow the rules are allowed to be abused by a government that has taken a hands-off view of homeownership with, for example, a “Not my problem” attitude and “No one forced you to agree to the CC&Rs.” This is disgraceful and reflects a society turned upside-down to benefit the powerful special interests, and an unethical government abuse of discretion with respect to protecting the people.

The average homeowner is being held to be the expert of all experts in equitable servitudes, contract and real estate law and even constitutional law, while the developers, builders HOA trade groups like CAI with the impressive list of notable attorneys draft documents and laws with the specific intent to benefit the fictitious person, the HOA. And in order to accomplish this, the US Constitutional protections must be disregarded, otherwise voluntary and knowledgeable acceptance with the unconscionable adhesion contract CC&Rs would not happen with any reasonable home buyer with free market forces at work.

Would the municipalities and state legislatures be so willing to protect HOAs if the US Supreme Court ruled that property taxes for homes in HOAs must be offset by the amount of services provided by the HOA that would ordinarily be provided by the government? We all know the answer to that question: NO!

What the bottom-line issue is is simple:

If the HOA can only survive by curtailing the US Constitutional protections that all public governments must obey, then the real estate package called the planned community is an anathema to the American system of government, and planned communities are a defective product forced upon home buyers by the state. They must be abolished.

If you believe that planned communities can function and must function under the American system of government, then the same laws and the same American system of government that apply to public government, must apply to HOAs.

Over the years, several homeowners “bill of rights” have been proposed, the latest being proposed by David A. Kahne and published by the AARP Policy Institute. Homeowner rights advocates debate the provisions of these homeowner’s bill of rights, and the industry supporters — the lawyers, CAI trade group, and HOA management groups — have proposed their own version of a bill of rights. In the midst of all these proposals, one advocate wrote, “There is only one Bill of Rights, the US Bill of Rights”. I ask, “What is the real bill of rights?”

The US Bill of Rights only pertains to that document called the US Constitution. These Rights are AMENDMENTS to the Constitution, period. The Constitution applies to the federal government, and to state entities only by virtue of the 14th Amendment to the US Constitution. They do not apply to private organizations, such as HOAs, unless the US Supreme Court has declared them so.

Read more . . .

Donie Vanitzian’s new book is what Hyatt’s book is to HOA attorneys, except it tells what the laws are and how to use them for the benefit of the homeowner, not the association. No longer will the legal field be flooded with the views of those who wish to perpetuate the status quo while offering “handout” legislation to placate HOA reformers. No longer will the media be forced to carry just the views of the establishment on “How to be a good homeowner and not cause problems with your HOA.”

Now, the laws restricting and obligating the duties and responsibilities of boards are explained for the homeowner’s benefit, covering not only condo/HOA statutes, but corporation, contract and tort laws. Here are few examples from the book:

“Proving a director’s breach of good faith may be difficult, but not impossible. . . . For anyone to take notice, the description must be graphic [detailed], strong and unrelenting. . . . No one law delineates the fiduciary duty of a homeowners association board of directors.” p. 267.

“The burden of proof is on the association [regarding fines] to establish that they followed proper procedures. Unless the association can unequivocally meet the burden, the fine should be challenged as illegal and all monies obtained as a result should be returned to the titleholder [property owner].” p.319.

“Methodically documenting the case against monetary fines or punitive measures is important because the board’s decision must stand the test of reasonableness if and when challenged. Watch for board actions that appear to exceed the scope of the director”s duties, or for those punitive measures against association members under which the board has no authority to do so.” p. 320.

“Where reserve funds do exist, boards should not withdraw those reserves, however temporarily, for purposes other than those for which the funds were intended. . . . The litigant owner arguing that his board has acted in bad faith and breached its fiduciary duty to titleholders and association by mismanaging assets, should consider initiating discovery specifically aimed at the association’s reserve studies or reports.” p. 376.

While the book focuses on the California statutes, the Davis-Stirling Act, the materials are applicable to other states. Just adapt the materials to the particular statues, if any, or apply the appropriate precedents.

California Common Interest Developments – Homeowner’s Guide, Donie Vanitzian, (The Expert Series, Thomson – West 2006). 1060 pages.

We are a nonlawyer legal services provider. We provide general information about the law. I am not a lawyer nor am I employed by a lawyer. I do not provide legal advice or opinion regarding your legal rights. You should consult a competent attorney or other expert for specific information and advice regarding the law. For more information, see AHLIS below.

Donie Vanitzian’s new book is what Hyatt’s book is to HOA attorneys, except it tells what the laws are and how to use them for the benefit of the homeowner, not the association. No longer will the legal field be flooded with the views of those who wish to perpetuate the status quo while offering “handout” legislation to placate HOA reformers. No longer will the media be forced to carry just the views of the establishment on “How to be a good homeowner and not cause problems with your HOA.”

Now, the laws restricting and obligating the duties and responsibilities of boards are explained for the homeowner’s benefit, covering not only condo/HOA statutes, but corporation, contract and tort laws. Here are few examples from the book:

“Proving a director’s breach of good faith may be difficult, but not impossible. . . . For anyone to take notice, the description must be graphic [detailed], strong and unrelenting. . . . No one law delineates the fiduciary duty of a homeowners association board of directors.” p. 267.

“The burden of proof is on the association [regarding fines] to establish that they followed proper procedures. Unless the association can unequivocally meet the burden, the fine should be challenged as illegal and all monies obtained as a result should be returned to the titleholder [property owner].” p.319.

“Methodically documenting the case against monetary fines or punitive measures is important because the board’s decision must stand the test of reasonableness if and when challenged. Watch for board actions that appear to exceed the scope of the director”s duties, or for those punitive measures against association members under which the board has no authority to do so.” p. 320.

“Where reserve funds do exist, boards should not withdraw those reserves, however temporarily, for purposes other than those for which the funds were intended. . . . The litigant owner arguing that his board has acted in bad faith and breached its fiduciary duty to titleholders and association by mismanaging assets, should consider initiating discovery specifically aimed at the association’s reserve studies or reports.” p. 376.

While the book focuses on the California statutes, the Davis-Stirling Act, the materials are applicable to other states. Just adapt the materials to the particular statues, if any, or apply the appropriate precedents.

California Common Interest Developments – Homeowner’s Guide, Donie Vanitzian, (The Expert Series, Thomson – West 2006). 1060 pages.

We are a nonlawyer legal services provider. We provide general information about the law. I am not a lawyer nor am I employed by a lawyer. I do not provide legal advice or opinion regarding your legal rights. You should consult a competent attorney or other expert for specific information and advice regarding the law. For more information, see AHLIS below.

1. Who cannot support, in principle at least, the David A. Kahne proposed Bill of Rights published by the AARP Public Policy Institute?

2. A clear statement of the purpose of the AARP proposal is contained in its forward written by the Institute:

The purpose of this publication is to outline a key set of ten principles . . . that states can follow when developing laws and regulatory procedures for common interest communities.

The guiding philosophy behind this publication is to promote healthy interaction between residents and their associations ….

3. If you cannot support all the ten points in principle, to what do you object? What principles would you like to add? Delete?

4. The introductory pages leading to these principles cannot really be argued against. While they could be stronger, they are a good statement of policy to guide the legislators. Offer your improvements.

See the complete commentary at AARP