A big step forward for HOA homeowners in AZ, that restores lost constitutional rights, as the Senate GOV committee passed the bill, HB 2052, in a 7-0 vote with 1 no-vote. On its way to a full Senate vote and then Final vote.
It should also be seen by HOA BODs as treating their members as first-class citizens. It follows in the footsteps of California’s SB 323 — passed into law in 2019 — and several court opinions upholding HOAs are public forums that provide free public speech on governing matters.
Read the summary carefully for it spells out your rights to be heard on an equal basis to the BOD’s actions and views. FACT SHEET FOR H.B. 2052. Here are some important excerpts:
“Prohibits an HOA from prohibiting door-to-door community activity on property normally open to visitors within an HOA.
“Prohibits an HOA from prohibiting or unreasonably restricting an owner’s ability to peacefully assemble and use private or common elements of the community, if done in compliance with reasonable restrictions for the property adopted by the HOA’s board of directors.
“Allows an owner or group of owners to organize to discuss or address condominium or planned community business, including a) HOA board of directors elections or recalls; b) potential or actual ballot issues or revisions to the HOA documents . . . or d) any other community business or action.
“Allows an owner to invite a political candidate or other non-owner guest to speak to an assembly of owners.”
Now of course, your BOD will turn to its legal advisors to get an opinion. If you’ve read my commentaries here you got a good idea of what many of the national lobbying member attorneys will probably telling your BOD. Under the bill, when it becomes law, members will have a better chance to challenge BOD decisions and get to the facts of who really runs your BOD. You might say, the bill will Make HOAs Great Again!
The substantive Arizona homeowner reform bill, HB 2052, has been assigned to the Senate GOV committee. No hearing date has yet been assigned. In short,
“Overview Stipulates that a unit owner’s association or a planned community association (association) may not prohibit a unit owner or member (member) from peacefully assembling and using private or common elements of the community.”
Effective presence in support of legislation requires immediate support to the assigned committee to let the members know before the public hearing. It is this private committee time where decisions are made. This advice can be found in Colorado’s Morgan Carroll’ book and discussed in Colorado senator’s guide to effective HOA legislation.
Many may not remember Ugenti’s conduct in 2013 but I have the hope that justice will prevail for homeowner with 2052.
“The loss of these perceived benefits lies not in this victory, but in the acts of Rep. Ugenti who is responsible for attaching, at the last legislative session, her defeated HB 2371 to SB 1454. SB 1454 now became a bill with two subjects in violation of the constitution.”
Here are the committee’s email addresses. AZ Senate GOV committee 2021
Sonny Borrelli sborrelli@azleg.gov
Juan Mendez jmendez@azleg.gov
J.D. Mesnard jmensnard@azleg.gov
Jamescita Peshlakai jpeshlakai@azleg.gov
Warren Petersen wpetersen@azleg.gov
Martin Quezada mquezada@azleg.gov
Kelly Townsend, Vice-Chairman, ktownsend@azleg.gov
The Arizona HB 2052 (2021) bill (sponsored by Rep. John Kavanagh) is an update to Arizona’s SB 1412[i] which died in Rules last year as a result of postponements due to the COVID-19 virus. Essentially, its
“Overview Stipulates that a unit owner’s association or a planned community association (association) may not prohibit a unit owner or member (member) from peacefully assembling and using private or common elements of the community.”[ii]
The list of AZ GE committee RTS names against HB 2052 shows only AACM and not CAI, who I believe is hiding from severe criticism of its support for unconstitutional HOA legal scheme.[iii] However, the long time activist CAI member firm, Carpenter Hazlewood et al., with several lawyers also being CAI activists, opposes this bill that seeks to restore political free speech to members in HOAs that was taken away by ab initio — from the beginning making the agreement null and void from the start — unconstitutional declarations of CC&Rs.
“We encourage our association clients to review HB2052. We encourage all board of directors to contact their representatives to discuss its association’s position on HB2052. If you have any questions for Carpenter Hazlewood about HB2052, please feel free to contact the firm’s Legislative Team.”[iv]
CAI dominates HOA board as a result of its CAI School of HOA Governance[v] indoctrination over the years. What is your board going to do? Stand by CAI’s opposition or obey its legal duties to do right by the members.[vi] It can only reject this bill on the grounds that it feels granting its members constitutional rights of free political speech — that all other Americans have — will harm the HOA government.
WHAT DO YOU SAY?
Do not allow your board to speak for you before government committees without a vote of all the members granting such powers. I have no doubt, based on my years of dealing with CAI on constitutional issues, that its email has been sent to your president your manager, and directors.
Stand by the Constitution!Contact your state representative and urge him/her to support HB 2052, which will soon come to a vote in the House.
[iii] In the Twin Rivers case, the CAI amicus brief to the NJ appellate court warned about“the unwise extension of constitutional rights to the use of private property by members [in HOAs].”CBTR v. Twin Rivers, 929 A.2d 1060 (2007); In reply to my amicus curiae brief, CAI responded with, “It is clear that the amicus curiae simply wants to impose constitutional protections on members in homeowners associations. The law has never supported that proposition.”(CAI/Smith amicus response.); CAI maintains HOAs are protected by and do not violate the Constitution — not so!
[iv]“CHDB Legislative Alert!!! AZ House Bill 2052,” Carpenter, Hazlewood email, January 21, 2021.
[v] CAI School of HOA Governance: The foundation and principles of the School can be traced back to CAI’s Public Policies, The CAI Manifesto (its 2016 “white paper”), its numerous seminars and conferences, its Factbooks and surveys, its amicus briefs to the courts, and its advisories, letters, emails, newsletters, blogs etc. I have designated these foundations and principles collectively as the CAI School of HOA Governance.
[vi]In my sampling of CC&Rs of both large and small HOAs I found boilerplate wording that focused on “maintaining property values” or “for the overall development, administration, maintenance and preservation of the Properties.” Almost all, but not everyone, contain a statement directed toward the member: “shall inure [take effect] to the benefit of the member” [or “each owner”], and “be mutually beneficial.” I came across this one-sided statement: “intended to benefit the Association.” The most liberal and progressive statement of purpose mimics the Preamble to the Constitution “to promote the health, safety and general welfare of the residents of the Properties” (the general welfare clause). The inclusion of “health and “safety” are redundant in that “general welfare” includes these concerns. See “HOA contractual Mission” in Restructuring HOAs – intents and purposes.
Ibram X. Kendi’s article, “The End of Denial,” appears in the September 2020 Atlantic Monthly. While Kendi argues that the upsurge in the denial of racism is a major step to ending racism in America, I can expand upon this mindset shift, this reorientation, to ending the denial of the unconstitutionality of the HOA legal scheme and model of local government. This mindset shift will produce the broad, substantial reforms to the current prejudicial view favoring authoritarian, private government HOAs.
Applying Kendi’s view to HOA constitutionality, Kendi urged “The American people [to] give policy makers an ultimatum: Use your power to radically reduce inequity and injustice, or be voted out”; and that “the American people [must] demand equitable results, not speeches that make them feel good about themselves and their country.”[1]
I have proposed a plan to accomplish this HOA mindset shift,
“Restructuring the HOA-Land Nation requires a cultural change in in the way of life of members; and an appropriate change in attitude by state legislatures, the people and the home buying public.”[2]
and describe the underlying HOA social and political culture,[3]
“This HOA-Land Nation Within America white paper challenges, confronts, and exposes the self-interest bias by pro-HOA stalwarts, and contains authoritative documentation and evidence as well as statements used in this indoctrination process.”
The question that I posed to the policymakers, the constitutional pundits, and Arizona Legislature as far back as 2006 remains long unanswered:
“Can private parties enter into contractual arrangements, using adhesion contracts and a constructive notice consent, that serve to regulate and control the people within a territory (an HOA), to circumvent the application of the Constitution?”
Following Kendi’s lead, it is well beyond time for the denial of unconstitutional HOAs to end. It remains in the hands of Americans to demand that the state and local governments, the policymakers, and the constitutional pundits restore full citizenship to Americans living in authoritarian, private governments functioning outside the Constitution.
References
[1] “Ibram X. Kendi on ‘The End of Denial’”, Press Room, The Atlantic Monthly, August 5, 2020.
While there are many anecdotal claims of attorneys for HOAs acting unprofessionally and unethically, there are sufficient instances documenting such conduct. I have encountered and witnessed some myself. Few have been charged to my knowledge.
The most common, in my experience, is a violation of civil court procedure where the attorney churns the account, seeks many continuances, and raises dubious claims based on the extension of commonly accepted legal doctrine and terminology. Fortunately, I am not an attorney and need not concern myself with extending “professional courtesies” to my opponents.
The questionable conduct I am addressing can be found in federal rules and in various state 1) supreme court Rules of Professional Conduct, usually under Rule 42, E. R. 1.13, Organization as a Client, and 2) under Rules of Civil Procedure, Rule 11(b), Signing pleadings . . . Representations to the Court.
Rule 11(b) states (emphasis added), in short,
“By signing a pleading . . . the attorney or party certifies that to the best of the person’s knowledge, information, and belief formed after reasonable inquiry:
“[I]t is not being presented for any improper purpose . . . or needlessly increase the cost of litigation . . . and other legal contentions are warranted by existing law or by a nonfrivolous argument . . . the factual contentions have evidentiary support . . . the denials of factual contentions are warranted on the evidence.”
Rule E.R. 1.13 states (emphasis added), in short,
“(a) A lawyer employed or retained by an organization [HOA] represents the organization acting through its duly authorized constituents [the BOD].
“(b)If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action. . . that is a violation of a legal obligation to the organization [directors duties for example], ora violation of law . . . the lawyer shall refer the matter to higher authority in the organization.”
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I am quite pleased with the opinion by the Arizona Appellate Court in ArizonaBiltmore Hotels Condo Assn v. Conlon (CACV 18-0709, June 23, 2020). This involved case of over 10 years, multiple parties, and 3 lawsuits dealt with a conflict of interest by the association’s president. He also owned several properties (a dual role conflict) subject to claims of who would get parking lot rental income.
My point of interest lies in the Court’s inclusion of a statement by the attorney for the association president in the 2013 lawsuit and used as evidence in the current case. Here we find a highly regarded law firm standing by its obligations under professional conduct and certification to the court, as above.
The president hired Cheifetz, Iannitelli & Marcolini, CIM, (now Iannitelli Marconi) on behalf of the association. “CIM soon raised concerns about the merits of the Association’s lawsuit and shared those concerns in a letter to [the president]” who did not pass the concerns to the board. As required, if CIM believed that there were serious concerns, it brought their concerns to the board a year later.
Now removed as president and still a director and still owner of the TCG firm in conflict, the Courted quoted CIM’s position in this president gone wrong case.
“CIM became frustrated with [the president/director] strategy and told him:
“Our duty is not to [TCG], it is to our client, the Villas Association, and the [condominium] community as a whole. As a member of the Board you have fiduciary duties. Given these fiduciary duties, we are at a complete loss to understand upon what basis you deem it appropriate to intentionally seek to sabotage the Board’s efforts to attempt to resolve the pending lawsuit with . . . . ”
The 2013 Court found the director guilty. It held “that [he] both breached his fiduciary duties and negligently misrepresented facts to the Association . . . controlled the information and did not make full and necessary disclosures.”
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FYI — The “Cheifetz” above is none other than Steve Cheifetz, former CIM manager now retired, with whom I’ve had the pleasure of knowing and exchanging views on HOA law and cases. He worked closely with Jonathan Dessaules, another outstanding Arizona attorney taking on homeowner cases.
HOA Constitutional Government 