The use of the words “shall” and “may” have generally accepted meanings in state laws and statutes. Their use in bills and laws relating to HOA-Land raises the highly controversial question of: Are HOAs state actors? “The overlooked impact and consequence of this word is to legalize activities and actions that were all-to-fore not legal rights granted to the HOA.”[1]
Arizona’s HB 2575 creates HOAs as state actors with the slick use of the legal differences between these terms. BUT, as applied to sui generis HOAs, implicitly create state actors. The bill introduces a new section (emphasis added) with, “ARS 33-1820. Powers of the association. Subject to the provisions of the declaration, the association may:” A 12 item list is presented mimicking the CC&Rs, a common tactic to legitimize contractual challenges to the governing documents. Very clever!
Item 4 is particularly onerous because of the use of the introductory “the association may.” A 12 item list is presented mimicking the CC&Rs, a common tactic to legitimize contractual challenges to the governing documents. Very clever!
Item 4 was particularly onerous because it permitted the HOA Board to lobby in the name of the members.
“[the association may ] 4. Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more members on matters affecting the association or planned community or the members’ interests.”
After 3 sessions ending with “ret on cal,” (retain on calendar) I emailed my may/shall state actor argument (as summarized here) to the legislative leadership resulting in the sponsor’s amendment rewording item (4). In relevant part, “the association may not institute, defend or intervene in litigation or arbitration in its own name on behalf of itself or a member.”
Thus, a potential constitutionality challenge was avoided as I had instituted in 2013, and won, with the help on a nonprofit legal organization, Arizona Center for Law in the Public Interest (ACLPI).[2]
Although the bill passed out of the House with the other argument that the 12 items also reflect an implied state arm it was a major victory 1) on a broad constitutionality issue and 2) a punch in the nose to CAI who actively sponsored this bill, according to the AZ Homeowners Coalition. CAI can be beat!
There are other arenas to challenge and expose CAI for what it is and stands for. I present some 56 events over 24 years that serve to guide what worked and what did not work for advocates to successfully challenge the Evil Empire. Organized into 4 sections: On Reform Legislation, On The Bill of Rights, On the Judiciary, and On Civics.[3] Available on Amazon, paperback or Kindle.
References
[1] See in general, Are HOA state actors created by statutory use of shall/may? (Section 2, paragraphs 5 +). (2019).
[2] Suing the AZ Legislature: AZ Attorney General admits SB 1454 HOA to be invalid and without effect.
[3] Read the book, HOA Constitutional Government: the continuing battle.
HOA Constitutional Government 