HOA Constitutional Government

A very serious, very real R11 application can be found in the controversy surrounding Trump’s claim that he can pardon anybody, even himself. The Constitution gives the President this power,

The President…shall have Power to grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment. (US Const., Article II, Section 2, Clause 2).

Now this is a very broad grant of power, but is restricted to crimes against the US and not civil cases. However, it is silent as to who can be pardoned, and whether or not it applies to the President. A strict examination, “parsing”, says the President can do whatever he wants to do.

What has Rule 11 have to do with this claim? It could be argued that,

1. It is frivolous;
2. Unsupported by evidence;
3. Presented for an improper purpose;
4. Not warranted by a nonfrivolous extension of the law, or to make new law.

These counter-arguments, based on the overall purpose and intent of the Constitution and its creation of 3 equal branches of government, provides a strong rejection of the unrestricted claims of Presidential pardon power. As I’ve read many times in court opinions, the court rejected frivolous claims as they “would make a mockery of the law.”

Or, as another put it, “would turn the Constitution on its head.”

Read more about court Rules of Civil Procedure, Rule 11  as applied to HOA litigation.

 

All states have court Rules of Civil Procedure similar to Rule 11 that govern trial court litigation regarding attorney representations to the court. It’s an ‘affidavit’ as to the validity of their claim, and sanctions for violations of the rule.

Presented below is Arizona’s Rule 11 with my annotations regarding keywords found in all cases, except with Florida where there is just vagueness. The attorney must affirm, under sanctions by the court, that these conditions have been met when he signs the court papers. Violations occur presumably because there was no need to verify the HOA’s claims, since the directors are upright, honest people.

I’ve read a great many cases across the country where violations of Rule 11 have gone ignored by the homeowner, probably due to “professional courtesy” by the homeowner’s lawyer. (Probably not wanting to isolate himself from his fellow lawyers least they retaliate).

I’ve found that many violations seem to center around what the losing homeowner shouts is a bunch of lies, but his lawyer never challenges the HOA attorney’s assertions to “put your money where your mouth is” and show me the evidence. Another major violation that I’ve come across is the filing of frivolous claims that on the face of them lack any support, all centering around the attorney’s favorite pastime of parsing the wording of a statute by adopting overly broad extensions of their everyday meanings.

What comes to mind is the infamous attempt at O. J. Simpsons murder trial defense when his attorney asserted, because the evidence was circumstantial- nobody saw the murders – that some stranger came walking by and decided to kill two people talking in the front yard. C’mon!

In particular, I witnessed a CAI member attorney filing an affidavit by the HOA manager “as a true and accurate statement” for moneys owed the HOA. Handwritten on the affidavit was a claim for additional money. The judge threw claim out in disgust.

Are the CAI attorneys worried? I think so. Revisions to the Rule were made in 2016 and modified in 2017 to invoke subsection (c) – consulting with the attorney, so as to avoid a possible State Bar or court action complaint for the violation.

It’s up to you, the homeowner, to fight for your rights and justice, remembering that your attorney works for you, not the other way around. Speak up or face another loss in court!

Ariz. R. Civ. Proc. R11:

(b) Representations to the Court. By signing a pleading, motion, or other document, the attorney or party certifies that to the best of the person’s knowledge, information, and belief formed after reasonable inquiry:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law.

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

(c) Sanctions.

(1) Generally. If a pleading, motion, or other document is signed in violation of this rule, or if a party fails to participate in good faith in the consultation required under Rule 11(c)(2), the court–on motion or on its own–may impose on the person who signed it, a represented party, or both, an appropriate sanction. The sanction may include an order to pay to the other party or parties the amount of the reasonable expenses incurred, including a reasonable attorney’s fee, because of the filing of the document or because of the party’s failure to participate in the required Rule 11(c)(2) consultation. In considering an appropriate sanction, the court must take into account the opportunities provided to the person or party violating Rule 11 to withdraw or correct the alleged violation under Rule 11(c)(2).

(2) Consultation. Before filing a motion for sanctions under this rule, the moving party must:
(A) attempt to resolve the matter by good faith consultation as provided in Rule 7.1(h); and
(B) if the matter is not satisfactorily resolved by consultation, serve the opposing party with written notice of the specific conduct that allegedly violates Rule 11(b). If the opposing party does not withdraw or appropriately correct the alleged violation(s) within 10 days after the written notice is served, the moving party may file a motion under Rule 11(c)(3).

People living in HOAs are getting a raw deal when the homestead statutes and bankruptcy laws do not protect against HOA liens.  But, maybe a solution to draconian foreclosures is possible by using the reverse mortgage process.

In short, the RM is a HECM loan (see Hud’s Reverse Mortgages) that allows the owner to remain in his home mortgage free and provides him with cash for his unrestricted use.  A condition of the HOA RM would be to pay HOA dues thereby cutting out the unconscionable enrichment of the HOA lawyers.   The term of the loan can be set, say, to 5 or 10 years at which time the owner must pay off the loan or sell his home to do so.  This will allow the owner to live there  for some period of time before selling, yet give the HOA its assessments.

 Others issues that are handle are: currently, the RM is set to about 16 years (age 78 if 26 at time of loan), so the special term limit is necessary to protect HUD; and there must be sufficient equity to offset the steep discount in cash available to owner by RM, but this condition exists today with the current foreclosure process.

 Adopting this approach is not only doable, but makes the HOA “community” a true community with a heart.  I mean, the IRS is not as harsh as the HOA in taking one’s home or garnishing wages to collect unpaid taxes.

(Proposed to Arizona Legislator).

 

California Sen. Wieckowski has sponsored SB 1265 that opens with, emphasis added,

SECTION 1. Section 4801 is added to the Civil Code, to read:
4801. The Legislature hereby finds and declares both of the following:

(a) Common interest developments function as quasi-governmental entities, paralleling in almost every way the powers, duties, and responsibilities of a local government.

(b) As a result, it is the intent of the Legislature for this chapter to ensure that democratic principles and practices are in place with respect to the governance of common interest developments.

The bill addresses my HOA Common Sense, No. 4 on democratic elections.[1] Facing our society and the role of HOAs, people must choose between laissez-faire private government vs. Constitutional government. Many object to state restrictions and CAI promotes unregulated governments without oversight as not being any problem.

Kelly G. Richardson wrote a column in the OC Register[2] proudly proclaiming that he’s CCAL in order to give the appearance of authority and expertness, but fails to mention that he’s CAI true and true or that CCAL is a CAI group. Talk about transparency and propaganda! In it he denies HOAs are quasi-governments, arguing that “This is a dangerous and false statement,” but offers no supporting evidence for his opinion.

Yes, it is dangerous to the current HOA legal scheme supported by state laws that favor the HOA entity over the rights and freedoms of their members, who are the people of California. As I’ve maintained, HOAs are de facto private governments operating outside our system of constitutional democratic government and not recognized by the state.[3] That means they exist and function like public government but state legislatures refuse to acknowledge that fact!

If the HOA wants to make its own laws, and most states give a large degree of freedom to local municipalities, especially under their “home rule” laws, why isn’t CAI promoting this constitutional method for HOA governments? In reality, CAI is subversive seeking to undermine constitutional government by playing on the emotions of the people.

And in what amounts to fearmongering, both Richardson and the California HOA lobbying entity, CAI-CLAC, make the following false arguments, that “It also strips local community associations of their local control as to whom can serve on their boards” and Richardson’s own, “This bill would bar any HOA board candidacy eligibility requirements.”[5] The Evil Empire alleges that the bill changes provisions regarding  who can be a board member and removes current HOA conditions for board membership; such as having a criminal record, or behind in dues, etc. A reading of the bill shows no such alterations of existing law that affect membership requirements or voting rights. See Section 5105 of the bill.[6]

This bill may not be perfect and not please everybody. No comprehensive bill in a democracy will do so. What it does do is to make a strong case for the defects in the private HOA government model in contrast to public government. 

I congratulate Senator Wieckowski on sponsoring this very important bill.
References

1.  HOA Common Sense: rejecting private government, George K. Staropoli, Amazon Kindle, 2013.
2. HOA Homefront: Potentially disastrous HOA bill pending in Sacramento, April 25, 2018.
3. Supra, n. 1.
4. “April CLAC-TRAC: CAI-CLAC’s 2018 Legislative Positions,” CAI-CLAC newsletter email of April 24, 2018.
5. Supra, n. 2.
6. See SB-1265 Common interest developments: elections.

Where oh where can the HOA Handbook be?  Oh where, oh where can it be?   Nowhere to be found, that’s where!

It came to my attention a few days ago that an attempt was made to buy the Homes Association Handbook[1], the HOA bible as I’ve frequently called it.  As I’ve been told, not even ULI (Urban Land Institute), the publisher in 1964, is selling it.[2]  (It’s not on Amazon). Anybody know why?

Perhaps in the light of recent disclosures and constitutional issues the promoters of the HOA legal scheme and marketing plan contained in the Handbook it can be quite disturbing to today’s special interest promoters.  I mean I’ve not found any analysis or commentary on the Handbook except for Prof. Even McKenzie’s Privatopia[3] and Donald Stabile’s CAI-ULI self congratulatory book, Community Associations [4].

If you read my Advisory blog, HOA Constitutional Government, you might have some idea why not. Or try reading Part I of The Foundations of Homeowners Associations and the New America; or Part 3 of Establishing the New America of independent HOA principalities.  You don’t have to be an Einstein to quickly realize that state laws and the CC&Rs all flow from the Handbook.

But, our elected officials see know reason to be in the know, and the media just follows along $$$$, leaving the average homeowner at the bottom of the food chain with no reason not to accept HOAs.

 

References

[1] Homes Association Handbook, Technical Bulletin #54, , ULI, 1964.

[2] In 2006 with the help of the late Donie Vanitzian I was able to get a copy of the 400+ page, 8 ½ x 11 document at a cost of $180.

[3] Privatopia: Homeowners Associations and the Rise of Residential Private Government, Evan McKenzie, Yale University Press (1994).

[4] Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing,  Donald R. Stabile (Greenwood Press 2000).