Tag: Arizona

Is there a CAI game plan to rewrite HOA CC&Rs to restrict member voting powers?

It appears to me that the 2012 CAI game plan is to completely rewrite the CC&Rs. This makes it about 1/2 dozen cases that I’ve heard in the past 6 months, and all seem to restrict the powers of the homeowner by not allowing homeowners to vote on important issues.

As an example, the current LA Times HOA column by Donie Vanitzian, “Homeowner association can’t adopt new bylaws without owners’ OK”,  deals with a question of a rewrite of the CC&Rs with provisions to exclude homeowner voting on certain issues involving IRS overpayments. This excellent article touches upon a serious move by  attorneys to further entrench the board of directors as a dictatorship. BEWARE!

One malicious rewrite is to permit minority voting control for assessments, amendments to the CC&Rs, and taking on outside loans/debt (CAI attorney). Minority control comes in the form of, for example as such a bill mandating minority rule was defeated in Arizona last year, a 2/3 vote of those in attendance with a 50% quorum, which gives 1 /3 vote to approve issues. (CAI attorney sponsored).

Now, they are going directly to the members who are well known to be apathetic and there’s a very good chance that they will sign on without even reading the details. One rewrite includes a 50% reduction in the quorum until a quorum is met, which would allow the political machine to adjourn the meeting and recall it every 5 minutes until they win. A second method, as I just witnessed, is to permit a 2/3 vote of the board to settle matters in the event that a quorum is not attained at the second meeting. (CAI attorneys).

In Arizona, SB 1476 would put a stop to CC&Rs that ignore member voting on CC&Rs amendments, and other restrictions on board acts to quash democracy in HOAs.. Minority rule, especially with the well know abuse by HOAs, is a very dangerous power as it would allow the political machine, the clique in power, to completely alter the CC&Rs o completely ignore any voting by the members, even to allowing future directors to be appointed by a “select” committee of current board members. And all would be legal, according to numerous court decisions, so long as the procedures specified in the CC&Rs are followed. Period!

What we are seeing here is CAI attorneys acting to promote seditious acts that undermine our Constitution and democratic society with its basic principal of majority control.

What we are seeing here is CAI creating and establishing HOA fascist governments where the HOA state objectives are first and foremost — to support the HOA corporation aided and abetted by corporate interests – the attorneys and management firms, the “hired hands.” The second part of the fascist form of government, in order for it to succeed, is the need to suppress individual rights and freedoms as we see with HOAs, and as we heard from CAI, “the unwise extension of constitutional rights to the use of private property by members . . .” (CAI amicus brief to NJ appellate court in Twin Rivers).

WAKE UP HOMEOWNERS! WAKE UP! YOUR PRIVATE PROPERTY HOME IN AN HOA IS A MYTH, AND ALL YOU OWN IN YOUR HOME IS THE RIGHT TO MAKE HOA ASSESSMENT PAYMENTS.

AZ SB 1468 – holding HOA boards personally liable for going to court

SB 1468 is one of three bills that will put into place strong and effective penalties against HOA boards who use the threat of law suits to intimidate and punish homeowners into keeping their mouths shut. This bill will hold directors personally liable for the HOA’s attorneys fees if they lose in court.

This long needed enforcement of HOA laws against the boards, rather than just the members, comes about as a result of the HOA industry failing to police itself and to oppose intentional and rogue HOA violators. HOA lobbyists pay lip service to the ”5%” bad boards, but oppose any meaningful attempt to reign them in, a gross failure to act as a good corporate citizenship. Well, it’s time to pay the piper! HOAs “have gotten away with murder” against widows, retirees, single parents, minorities, and those who do not have the money or stamina to buck the HOA. Many of which are simply having the board to just comply with the law and governing documents.

Not only are the boards themselves directly at fault, they are also guilty of abdicating their duties and responsibilities under the law and governing documents to their hired hands, the attorneys and management firms. They are negligent in allowing their agents to act without accountability and without proper oversight and restrictions. The HOA attorneys make money win or lose by going to court. The HOA attorneys often step across the line and collude with the president and wayward boards to violate the laws and governing documents under the excuse of “in defense of my client.” They violate Arizona R. Civ. P. 11(a) (federal rule 11(b)) that requires,

The signature of an attorney or party constitutes a certificate . . . that to the best of the signer’s knowledge, information and belief formed after reasonable inquiry it [the complaint] is well grounded in fact and is warranted by existing law . . . and that it is not interposed for any improper purpose, such as to harass . . . or needlessly increase the cost of litigation.

and Supreme Court Rules of Professional Conduct, 1.2(d), counseling client to break the law, and  1.13(b), Organization as Client, with respect to knowledge of client breaking the law.

Former Arizona Supreme Court Disciplinary Commission Chair, David D. Dodge, wrote about attorney “overzealousness” in the June 2005 edition of Arizona Attorney. (See my Commentary, HOA attorney fiduciary duty to homeowners).

The pro-HOA forces will immediately cry, “NO one will want to become a board member and the HOA will fail.” Well, I got news. Not too many members are rushing to become board members today, anyway. This bill requires the legislators to not only make a just and proper approval of the SB 1468, but to take a proper and just ethical and moral stand against authoritarian, undemocratic private governments that abuse the citizens of Arizona. Violations of the laws and our principles of democratic government cannot be allowed to continue! There are existing legal mechanisms today — just as there are mechanisms for HOAs to obtain public street variances, but HOAs prefer their independent principality status rather than be part of the greater community — that will maintain the perceived planned community benefits while holding the HOA government subject to the 14th Amendment as required of all government entities. (See A proposal for the “Muni-zation” of HOAs; Stop developers from granting private government charters).

Homeowners in HOAs have been waiting a long, long time for effective enforcement against HOA violators. Passing SB 1468 would be a very good start!

PS. The other bills are HB 2445 and SB 1240.

SB 1468 changes to the law

Notwithstanding any provision in the condominium documents, if a unit owner incurs attorney fees in a court action between the condominium or the board and the unit owner regarding enforcement of the condominium documents and the unit owner substantially prevails in the action, the following apply:

1. The members of the board of directors who voted on the record to support the court action against the unit owner are personally liable to the association for attorney fees and costs incurred by the association in the action.

2. If there is no record of who voted to support the court action against the unit owner, all of the members of the board of directors are personally liable to the association for attorney fees and costs incurred by the association in the action.

Obstacles to substantive HOA reform legislation

What comes out loud and clear, from the Arizona senatorial debate (Arizona Senators debate HOA legal status), as obstacles to substantive HOA reform legislation is the dogmatic belief by many in the righteousness of the HOA legal scheme. That the will of the people shall be allowed to prevail, without restraint of any kind, over the supreme law of the land.

Until advocates can reconcile their belief in the benefits of their HOA with the need for substantive HOA reform legislation, what can they expect of others? And that requires not surrendering to the irrational fear of losing their HOA, as pro-HOA supporters find useful to prevent necessary reforms.

Until advocates are able to get the policy makers, the legislators, to reconcile their belief in the benefits of HOAs with the need to rewrite the HOA legal concept, there will be no substantive reforms. And advocates will return year after year with their “petitions for redress” only to have their petitions “answered only by repeated injury.”

But first, they must look inward, toward themselves.

Arizona Senators debate HOA legal status

 The Voice of Times Past  and the Voice of Times Present

 

A lengthy exchange, exemplifying  the polarized views of the HOA legal concept occurred between two committee members  during the Senate VMGA Committee hearing on SB 1113, control of public roadways  (Jan. 31, 2012).  I refer to the two Senators as the Voice of Times Past and the Voice of Times Present.

Senator  John Nelson, Times Past,  speaks from the past and echoes the pro-HOA themes of maintaining property values, of freedom of contract, and unquestioned consent to agree  and full compliance with contract law.  His position speaks in favor of HOAs as independent principalities above all other laws of the land, holding that private parties can contract to avoid the Constitution and laws of the land.

I do not mean to be disrespectful,   as the Senator appears to truly believe in his position — and we all are entitled to our beliefs — yet he  has not realized the implications of his beliefs on his duties and obligations as a state senator.   He has  failed to address the consequences and impact on society of such beliefs, which have become  ingrained and dogmatic over the many years

Senator Frank Antenori, Times Present, speaks of constitutional infringements by the HOA legal concept and of violations  of our principles of democratic government by de facto  private entities unaccountable under the Constitution. These issues were  also raised by the bill sponsor, Senator Nancy Barto. 

What is apparent in this exchange is that to resolve the alleged safety issues on street parking, the HOA simply refuses to make use of the legal vehicle of seeking planning board variations, thus making this a political power issue between public government and private HOA principalities.  Furthermore, putting “we can contract to do anything we want,” even to ignore the laws of the land, is an absurdity too often used by those seeking unrestrained power, and too  often irresponsibly thrown about.  Case law has repeatedly rejected any such unqualified authority. 

(It should be noted that CAI did not speak at this hearing, and it’s member blog did not address constitutional issues of de facto private governments seeking special treatment above the laws of the land).

What  the Voice of Times Yet To Come  will have to say depends on what occurs today, in Arizona, and  in all state legislatures across the country.   Will the 200 plus year American experiment in democratic government be extinguished by a successful second, 48 year American experiment in private, authoritarian government functioning  under fascist principles?

The bill squeaked by and was passed by a 4 – 3 vote.

 The complete public video of the hearing can be found in the Arizona Legislature video archives for that hearing (click here).   Jump to 39:00 minutes for the 30 minute exchange.  After viewing the video, you will better understand how HOAs have become a second political government at the local level, and what legislative obstacles lay in the way to susbstantive HOA reform legislation. 

At about the same time as this Arizona debate, an NPR radio talk show took place  in Charlotte, NC (WFAE,  Charlotte Talks, Mike Collins, host)  that also addressed the good, the bad and the ugly of HOAs.  It is well worth listening too, as it also addresses public policy concerns. The link can be found at the  North Carolina Coalition for Homeowners Rights website.

See also, 

1.  Evan McKenzie’s Privatopia Papers contribution to the constitutional issues debate, HOA debate: illegitimate government and invalid CC&Rs contract.

2.  HOA-Land — the failure to democratize.

Where are the volunteer HOA board members?

“We’ve been unable to even elect officers,” Freedman said during a state (WA) Senate hearing this week on a bill that would allow homeowners’ associations to lower their quorum requirement to 34 percent through the county court system.

(Homeowners’ associations ask state for help)

The downside of the great and glorious innovation in housing is hitting hard, because the defective legal scheme provides for no downside protections. As successful promoters well understand, and are so motivated, just sell the upside and don’t worry about the downside. Everybody eagerly bought into this sales pitch, and still are, including state legislators.

And lowering quorum requirements only allows the political machines and cliques to retain even more power of their failing HOAs.

As covered in this week’s CHDB blog by Patel (AZ CAI law firm in Arizona headed by CCAL president-elect Carpenter), Where are the volunteer board members? (No Board – Now What?). The end result is that HOA corporations require a board in order to legally function, and the state will wind up having to protect their “investment” in planned communities/HOAs by the courts appointing Receivers to run these HOAs, or let them fail. An alternative not clearly spelled out in the CAI blog.

The unaccountable “free ride” of doing as I please without fear of enforcement penalties under state laws is coming to a close as a direct result of the uncontrolled abuse within the HOA industry.  As a direct result of the actions of homeowner rights advocates, and the few media willing to tell it like it is, state legislators are beginning to see the light and put an end to these independent principalities.