HOA Constitutional Government

I am happy to see a new crop of political scientists take on the battle against private HOA governments as has Mr. Peirce in his Commentary, “Privatized Neighborhoods – The Future We Want?” (Arizona Capitol Times, July 29, 2005). Having read other exchanges on this topic between Mr. Peirce and Mr. Nelson elsewhere, I feel my comments are in order.

First, as referenced in the Commentary, HOAs are a socialist form of governance, if not a communal form. Socialistic because it is governed by the concern for the “the most good for the most people”, an accepted doctrine by Jeremy Bentham and Vilfredo Pareto, both concerned with the efficiency and productivity of government, and not with democratic principles. When this motto becomes the overriding justification for decisions, with the relegation of the fundamental American principles of freedom and individual rights to lesser importance, we have socialism.

To answer the question posed in Peirce’s Commentary title, it’s a resounding NO! The future cannot continue the trend to more and more private communities spreading across the state or the country. If the trend were allowed to continue, then Arizona must undergo a change of name to, The United HOAs of Arizona.

For the complete Commentary, see
AZ Capitol Times, or
United HOAS

Former CAI president Wayne Hyatt, and co-author Susan French, devote chapter 4 of their book, Community Association Law (1998), to the topic of mini-governments.

“The third theory, ‘symbiotic relationship’ or the ‘ sufficiently close nexus’, are less relevant to the common interest community setting of today [1998] but may have more relevance in the future. State action is found . . . .”

The 1998 or earlier cases presented in this chapter of this pro-HOA book include:

Marsh v. Alabama, 326 U.S. 501 (1946) (the poster case against mini-governments)
Shelly v. Kraemer, 334 U.S. 1 (1948)
Gerber v. Longboat Harbour N. Condo, 724 F. Supp. 884 (M.D. Fla. 1989)
Laguna Publishing Co. v. Golden Rain Found. of Laguna Hills, 131 Cal. App. 3d 182 (1982) (is Leisure World condo a mini-government)
Midlake v. Cappuccio, 673 A.2d 340 (Pa. 1996) (sign restrictions)
City of Ladue v. Gilleo, 114 S. Ct. 2038 (1994) (signs)
Covered Bridge Condo Assn. v. Chambliss, 705 S.W.2d 211 (Tex. App. 14 Dist. 1985) (reasonable covenants are not unconstitutional; age restriction)
Majestic View Condo v. Bolotin , (429 So.2d 438 (Fla App. 4th Dist. 1983) (pet restrictions and notice)
Golden Sands v. Waller, 545 A.2d 1332 (Md. 1988) (assessments and notice)

I’ve commented several times on the astuteness of the Constitutional Convention representatives who met in Philadelphia in 1787 to rewrite and revise the current federal charter, The Articles of Confederation. It only took these wise men some 11 years to realize that the structure of the Articles was severely defective and a new charter was necessary. The result was the Constitution of the United States of America.

In our times, we have a new form of community goverance, the homeowners association, created by the ULI and FHA with their guidleline, The Homes Association Handbook in 1963. This handbook was motivated primarliy by profit oriented business interests, and not by those seeking to establish a better form of community governance.

Why continue, as evidenced by the mindless struggle of state legislators and some advocates, to try and make this charter, this constitution, for community governance work? We already have laws that apply to all homeowners equally. They’ve been chasing their tails for over 40 years now, in the misguided attempt that they can write a better constitution than the US Constitution. It’s time that they realize that the HOA concept must be allowed to take its destined course, and stop trying to make the unworkable workable for the people of this country.

There are workable alternatives for planned community governance, but would not be acceptable by those whose income stream is derived from HOAs — the special interests that created planned community governance.

Let’s take a look at this topic from the average home buyer’s perspective, and not a legal one. This is a valid approach pertaining to the buyer’s lack of legal expertise and understanding.

The legal myth that you own your home in fee simple absolute is false, since the law now talks of property interests separately from ownership or title. That is, you may own the property but have very little property interest rights, as we see with HOA property ownership.

Each homeowner in an HOA has a property interest in the common property as well as in the private prperty of each of the other owners. If you don’t believe that, then why are you held to a decision affecting your private property based on a vote, a low as 51%, of your neighbors, that you did not consent to? Similarly, you affect the property interests every other homeowner’s private property.

I referred to this as a communal social and political structure — you all don’t need to eat in one big common mess hall to be in a communal society. Look at it this way, the communal interests are very much like community property rights between husband and wife — what one does affects the other. So, too, with your fellow HOA members.

One homeowner argues that each homeowner within the HOA holds an interest in each of the other owners’ private property, but it is not an interest per se as it is an interest in how the properties are maintained and how they appear from an aesthetic perspective. I think the argument can be made that CC&Rs that require the votes of others on how you paint your home or how you maintain your landcaping definitely “touch and concern” your land. Also, being able to park any vehicle on your driveway, would also touch and concern your land.

Such restrictions are covenants and therefore touch and concern your land, making home ownership in an HOA much like being married to your neighbors.

Were you told of this legal relationship? Did you fully comprehend the consequences of your “agreement”? Were you told that the proper approval of an amendment to the CC&Rs can substantially change your property interests, contrary to your wishes, like join an independent country club?

First Supplement to Memorandum 2005-25
Statutory Clarification and Simplification of CID Law (Public Comment)

HOMEOWNER ASSOCIATION AS LOCAL GOVERNMENT

Mr. Staropoli asserts that a homeowner association has much more in common with a local government entity than it does with the typical nonprofit corporation. See Exhibit p. 6. Accordingly, he feels that a homeowner association should be subject to the same constitutional and statutory constraints that govern a state entity:

Our system of government with its checks and balances,
separation of powers, “clean elections” procedures, due process
protections in terms of sufficient notice of violations and hearings
in which the homeowner can confront the allegations, examine the
witnesses, and present evidence must be applied to CIDs.

The issue raised by Mr. Staropoli — the extent to which a CID should be subject to the sorts of constraints that apply to a governmental entity — is an important one. However, it is beyond the scope of the current project. The Commission will consider the issue in a later stage of its general study of CID law.

Brian Hebert
Assistant Executive Secretary
California Law Review Commission

See July 6, 2005 editorial, Property Interests
See March 14, 2005 CLRC letter on Rights.