HOA Constitutional Government

Below are my comments on some important issues, most of which were not directly addressed by the survey. The questionnaire is not numbered, so I am forced to refer to the opening line of the question as a reference.

COMMENTS:

This was a survey of planned community or condo residents, and non-HOA residents were not included. How the random list was generated is not given. I presume from CAI member organizations. Neither are we told the number of different HOAs, or their size and makeup. How many different HOAs were included? One? Five? 100?

As I wrote some time ago, I classify planned communities as either Residential, Resort or Retirement. With the last two categories, home buyers have a higher acceptance of rules and regulations, and the obligations to conform in these “institutionalized” settings. With respect to Residential, buyers expectations can run from “just buying a home” to “a property value protection association”, as the proponents argue as a reason for choosing HOAs. Which category, and to what extent, comprise the respondents?

About two-thirds were from single family homes.

1. Government Control / HOA purchase impact

In response to this question, 78% said no to “more government control.” That’s understandable. How about this question instead: Should homeowners in HOAs be subject to constitutional protections under the 14th Amendment as people not living in HOAs?

This response, aside from the form of the question posed, may be explained by the response to the question of “more likely to purchase” in an HOA, where 62% said that being in an HOA had no impact on their decision. That, alone, says that there is a severe lack of information about the consequences of owning a home in an HOA, or that there was no free market alterative available as a result of planning board requirement for an HOA in new developments.

2. Reason for buying
Surprisingly, only 23% said property maintenance was the main reason for buying. Another 15% said a “clean/attractive neighborhood”, and 13% said for safety reasons. Only 4% said for property values. This is confusing in view of the propaganda coming from CAI and other special interests, especially if the respondents are indeed CAI members.

3. Assessments &enforcement (What should be done regarding nonpayment?)
The response, 78%, to the question asked avoids the issue of foreclosure, just that “insist that every homeowner pay the assessments.” No one woud disagree with that reply. However, nothing was asked about unjust foreclosures and the failures of the HOA to manage its financial affairs like any other business.

4. Questions on Personal Involvement

Contrary to other data, the respondents show a high degree of involvement on HOA affairs — 72% have attended a board meeting, and some 60% did so more than 3 times. An important factor in this question is the time frame. The time frame was not included in the question (last year? last 5 years?).

5. Questions related to the General Satisfaction and the homeowner’s experience with his HOA:

(“Have you ever brought a complaint”, “anyone complain about the homeowner”, “did you complain about another”, and “overall HOA experience”).

Over 75% have not filed a complaint or were not subject to a complaint, and therefore some 71% are quite pleased with their HOA. That means that most people obey the rules, just or unjust, perhaps because of a fear of severe financial consequences or of losing their home through foreclosure. The question is not posed. Of the 25% who were involved in the complaint process, approximately 75% were satisfied with the results of the complaint, about equally whether the homeowner filed the complaint or was the “defendant.”

This is a surprising result. It give the impression that the respondents were “Charley good guys” — innocent parties — and it was those other people who were not team players. In an unbiased survey, one would have expected an equal occurrence of “I’m right” whether the respondent was the plaintiff or the defendant. Here, the respondents are always right, whether or not they complained or were the culprits. This is not what one would expect.

Conclusions:

I’ve always been disturbed by these questionnaires that assume a voluntarily made, fully informed consensual decision with all the facts laid out on the table, with free market forces at play — the ability to choose a similarly property not in an HOA. No question was asked “If a similar property was available, would you choose the HOA?”, which assumes full discloure has been made to the buyer.

Also, these surveys are used to avoid the more serious issues of constitutional law — should state governments be promoting and encouraging undemocratic, authoritarian, private contractual governments that operate without accountability to the state and its laws — the lack of enforcement for violation of state laws question.

Below is a copy of an email sent to an inquiring Arizona homeowner:

Unfortunately, the “system” and powers that be do not see your problems, and those of other homeowners, as requiring the legislature to step in and protect homeowner rights.

Your voice needs to be heard at the legislature that will begin in January. We are again attempting to get enforcement on the agenda, licensing of HOAs and management firms, rather than an ineffective “complaint desk” ombudsman. We need enforcement of those laws that are still being ignored by HOAs and management firms, because there is no penalty to make them think twice.

We can require that HOAs post all infractions to the rules and the corresponding penalties, so, like with criminal law, homeowners can have proper notice. We can use an independent tribunal to hear and judge alleged violations of the rules, such as is available with the Office of Admin. Hearings for certain state agencies, but not for unlicensed HOAs.

We must remove the right of a foreclosure penalty that represents an unconstitutional cruel and unusual punishment of the homeowner who cannot meet their obligations to the HOA. The HOA is not at risk as is the mortgage company, and to take away a $200,000 home for a $200 debt obligation is, by anyone’s standards, excessive punishment. If the HOA were a de jure government, this could not occur.

Each and every state legislature should be reminded of the words of the Declaration of Independence:

In every stage of these oppressions we have petitioned for redress in the most humble terms; our repeated petitions have been answered only by repeated injury.

In Contracting Communities(1), the author makes a blunt statement of what really has occurred with respect to the alleged preference for planned communities:

Those seeking to secure premium ambience [the planned development concept] . . . may be motivated by the belief that this local public good will be capitalized into the resale price of their homes. . . . Residents in private developments purchase premium ambience by ceding property rights of their own, both directly through acceptance of reciprocal restrictions on their own land, and indirectly through the installation of a governance regime with the power to alter and enforce the prevailing land use controls.

But this is only one part of the reality that is promoted by the planned community special interests – the developers, the real estate agents, the Community Associations Institute (CAI), the Urban Land Institute (ULI), and almost every state legislator across the country. What has been kept hidden are

1. the questions of informed consent and misrepresentation in the advertising and selling processes,
2. the state’s role in not protecting consumers by warning of the extremely prohibitive governing documents that contain very little homeowner rights protections,
3. the fact that this private contract permits these authoritarian private govenments to bypass the Constitutional protections that would apply if the HOA were a municipal government, a state agency or a state actor.
4. the court rulings that these type contracts have been found to be unconscionable adhesion contracts, and
5. the special interest promotion of the Uniform Comon Intrest Ownership Act (UCIOA), and its various state versions, recognize in Section 1.112 that the governing documents may indeed be found to be an unconscionable adhesion contract, and sets forth limitations as to how the court may proceed and what factors it may consider. (See 2005 NJ bill S2344, page, line 13 et seq.; 1994 draft model at Consumers for Housing Choice, http://www.consumersforhousingchoice.org/UCIOA%2094.htm).

What is the legitimate government interest that would justifiy this treatment of the public? What is the overriding necessity, not convenience,in support of this “hands off HOAs” position by the legislatures?

1. Contracting Communities, Lee Anne Fennell, 2004 U. Ill. L. Rev. 829 (2004)

On p. 102, Part 1, Ch. 4, of Robert Nelson’s book, Private Neighborhoods, the author quotes my 2000 address to the Arizona Legislature’s Interim HOA Committee, the “jump-off” event for the following 5 years of homeowner rights advocacy in Arizona.

The author also refers to HOANET as “a group of dissaffected unit owners”, while stating’

“George Staropoli called on the state legislature to adopt a ‘homeowner’s bill of rights’ that would be incorporated automatically in the founding documents of every neighborhood association and provide for ‘legal sanctions against the abuse of these rights by the board of directors'”.

The author then misstates my proposal as if it were a matter of consumer choice for individual associations to choose as they please. He then offers: “Many Americans have in effect chosen a dictatorship.”

Below is an excerpt from my statement of Sept. 7, 2000:

Statement Prepared for presentation to the
Homeowners Association Study Committee Of the Arizona State Legislature
September 7, 2000

Good morning Mr. Chairman. Good morning ladies and gentlemen of the Committee. Once more I reluctantly find myself before the committee to speak against my neighbors and other citizens of Arizona. I don’t relish being here; however, circumstances and events have brought me here.

As in the times of 1776, a small, principled and dedicated group of citizens are seeking a redress of their grievances. They first looked to the existing government, the HOA Board, and having failed to obtain satisfaction therein, must seek other means of redress – a radical change in the concept and legal structure of the homeowner association and its controlling document, the CC&Rs. What is needed is an inclusion of a homeowners Bill of Rights and the removal of such onerous provisions that make the homeowner nothing more than an indentured servant, living at the suffrage of the board – pleased if the board is benevolent; living in fear if the board is oppressive. To quote from the Declaration of Independence,

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.”

“That whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it, and to institute new government . . .”

Continuing my quote,

“In every stage of these oppressions we have petitioned for redress in the most humble of terms; our repeated petitions have been answered only by repeated injury”.

The people of Arizona only wish to be able to present their case before this Committee in a fair and just manner. However, sadly I feel that, because of the composition of the committee they are being asked to justify their grievances before their oppressors; they are being put directly into a trial situation with their “oppressors” sitting in judgment. The homeowners, Arizona citizens in good standing, who find these truths to be self-evident, are being called to justify their complaints without the committee calling for the perpetrators to answer for these repeated acts against them.

Today we seek the replacement of the homeowners association form of totalitarian government as set forth in the CC&Rs. We seek, among other changes to the CC&Rs, the inclusion of a homeowners’ bill of rights, restoring those rights that every American is entitled to and should enjoy in today’s society.