Tag: Arizona

HOA attorney collusion and regulation of public streets

During the past Arizona legislative session, HB 2153, dealing with a re-assertion that public streets are regulated not by HOAs but by civil government, was defeated by HOA/CAI opposition and a group of HOA special interests, Sun City HOA.   Part of the argument for the bill were the realistic incidents where the HOA fined a homeowner for a car parked in front of his home, on a public street — without any attempt to verify whether the car was owned by a member of the household.  In other words, in a display of gross injustice and a  stark display of HOA power and intimidation, the HOA simply fined the homeowner. (It is well understood that some 90% of the homeowners pay up rather than go to court to fight for their rights).

 What is further unconscionable and irresponsible, and a violation of an attorney’s code of conduct, HOA attorneys would simply “pick up the paper,” file the charges against the homeowner, and of course tack on its fees, and proceed in a flagrant violation of  Rule of civil procedure, 11(A), which states, in part (emphasis added),

The signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

and the Arizona Rules of Professional Conduct, R42, Ethical Rule 3.1 (mimics the above Rule), and ER 3.3, Candor to Toward Tribunal, in part,

(a) A lawyer shall not knowingly:  (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer . . .  (3) offer evidence that the lawyer knows to be false.

Is this legalized extortion by the HOA attorney and HOA board, acting together?[i]

While the bill was before the legislature, an on going court case[ii] was taking place, just brought to my attention.  A homeowner was being fined for just such an occurrence.  Both the management firm and HOA attorney are Community Association Institute (CAI) members, a trade group that lobbied against the bill.  CAI advertises as being the leading educator for the HOA industry and HOA law experts.  The Arizona law firm is Maxwell & Morgan where both principles are members of the CAI Community Association College of Lawyers.

Upon being notified of parking violations, the homeowner properly informs the management firm, Rossmar & Graham, that the cited cars are not his, and provides the license plates of his 2 cars (Mar. 28, 2009 email).  Subsequently, the board denies his request to remove the fines.  According to the homeowner, the attorneys continue and file suit, and then remove their claim for the fines.  Undoubtedly, the attorney realized she was in trouble for blindly doing the HOA’s bidding. 

Most egregiously and unethically, the M & M attorney still sought attorney fees from the homeowner.  This is unconscionable and unethical.  The attorney did the board’s bidding, ran up  fees, and then found that she was involved in an unsupportable charge, but still sought her fees from the homeowner.  The homeowner has to pay for the wrongful acts of the board, and the blind acceptance of the suit by the attorney? 

And now we have a former CAI legislative action committee chair, Scott Carpenter (another CAI college of lawyers member), whose firm advises HOAs on possible loopholes in the right of HOAs to regulate parking[iii].   In an inexcusable misstatement of the public parking issue, attorney Patel fails to mention the main issue regarding regulation of public streets by public government, citing only a Missouri case, Maryland Estates v. Puckett, that affirms HOA regulation of its members, but not the public.  His reference to checking vehicle ownership is only made in regard  to the possibility of illegal towing.

The battle for HB 2153 was precisely to prevent such abuse as occurred in the Wigwam Creek lawsuit.  But, Carpenter, in his Arizona Legislative Session blog entry of January 13, 2010, “Authority Over Roadways,” only saw, “If the bill is really about parking, then enforcement of a parking prohibition in a planned community’s governing documents is the enforcement of a contractual provision and does not, in its enforcement, exert any ‘authority’ over the roadway itself.”   Clearly this is a biased advocacy statement regarding pending legislation, and hiding behind the imprimatur of an attorney, not addressing or cautioning his readers about the implications regarding the public who are not members of the HOA.

In my Commentary of April 5, 2010[iv] I stated that the purpose of the prolific advisories/advertisements were “to seek and promote loopholes and technicalities in the law and governing documents that would lead to adversarial litigation.”

Something is rotten in Denmark!  Shame on CAI, Maxwell & Morgan and Carpenter, Hazlewood.   And shame on the Arizona Legislature for seeing no evil in regard to public control of public streets, and for accepting the voice of the CAI attorneys as gospel.

Notes

[i] See, Ethical obligations of attorneys to HOA members.

[ii] Wigwam Creek North HOA v. Fuchs, CC: 2010- 49644,  Estrella Mountain Justice Court, Maricopa County, AZ.

[iii] “Enforceability of Parking Restrictions”, Nikita V. Patel, Esq., July 9, 2010 enewsletter, Carpenter, Hazlewood, Delgado & Wood, PLC.

[iv] “How good are the CAI member HOA attorneys?“,  HOA Private Government, http://pvtgov.wprdpress.com.

HOAs as an institution and its impact on society

The common definition of “institution”, for our purpose, is “ a custom, practice, relationship, or behavioral pattern of importance in the life of a community or society”, or  “an established custom, law, or relationship in a society or community.”   The degree or strength of the acceptance of the established custom or behavior pattern often results in the perception that the institution is a concrete and indestructible reality, and not dependent on one’s belief or acceptance of the  institution.  For example, marriage is an institution that has been losing its acceptance in recent time.  

The definition of an institution well applies to planned communities and homeowners associations.  As a result of the failure over 47 years to mount substantial opposition, homeowners associations have become an American institution, an accepted  way of life.  While there were “spots” of protest and informed communication over the years, it was the accumulated effect of the national lobbying organization, CAI, supported by real estate and land usage legal-academic aristocrats writing in their journals and speaking at conferences, that brought about the institutionalization of HOAs.  Homeowners associations  have become accepted as a way of life in our society and culture, and thoroughy ingrained into our society. 

Consequently, it does not come as a surprise that any substantial opposition, such as my commentaries and citations of authorities, is met with disbelief. This is normal human behavior, which occurs with any idea or facts that are contrary to one’s long term beliefs and values.  This is the effect of institutionalization.  

When confronted with facts and hard evidence to the contrary of these long held beliefs, the normal reaction is a defense of the long held belief.  After all, many aspects of one’s life are tied to one’s beliefs and values, and they cannot be dismissed out of hand.  The common reactions are:  You are crazy! You don’t know what you are talking about!  You’re a weirdo!  A radical!  The reaction is to ignore any evidence to the contrary. 

The stronger the belief, the more reactionary is the response to contradictory information.  Defensive arguments offered to retain the long held belief can rise to highly illogical and absurd defenses.  Even legislators are not immune to this aspect of human nature.  Such is the effect of institutionalization on society.   

HOAs became part of our society with the help of the special interests who did not speak, and continue not to speak, of any negatives about homeowners associations in America.  The unspoken alliance of “no negatives” has been thoroughly ingrained into our elected officials, the media, and the public at large.  Just a natural consequence of the institutionalization process.  But, an institution does not automatically carry the stamp of being ethical, moral or just.  Slavery was once an American institution.  Established practices and behavioral patterns just reflect the mindset and values held by a large majority of the society, and we well know societies can go awry from time to time.   

The only rehabilitation therapy is the continued and repeated exposure to the facts, and I mean facts backed by hard evidence, legal authority, and confronting those seeking to maintain the institution’s continued existence in our society.  Such as, presenting the other side of the issue at hand, which, as we know, was often purely propaganda and not the full truth.  (A good example would be the HOA Academy backed by a number of Arizona towns that does not inform HOA members of their limited rights when a suit is brought by their HOA, or provide information about the statutes and the demanding nature of legal Rules of Procedure). 

In time, either the established institution is now seen in a a different and unfavorable light, or society becomes divisive with the supporters taking dogmatic ideological positions, resorting to, essentially, an “I don’t care” rationale.  

CAI attorney advises negotiate payments in HOA short sales

Arizona’s Ekmark & Ekmark (CAI/CCAL member) has joined the blog world.  It’s chosen vehicle is a Bog provider called Posterous, and his blog is simply http://ekmark.posterous.com — easily confused with preposterous. 

 In its blog, advice is given to HOA boards to be realistic and negotiate for partial payments of debts, as any other organization would do when facing financial problems with a small chance of getting any money out of debtors.  In short sales situations, Ekmark informs the HOA that it must act quickly to get at least some money out of a losing situation, even though it is complicated negotiating process.

 I have written repeatedly about the short-sighted, self-defeating, hardnosed position that the HOA does not negotiate and does not give in one inch.  That posture stems from the great fear of a slippery-slope path to a loss in absolute power over homeowners — it would be a seen as a sign of weakness.  How true that is — asking the HOA to face reality rather than to foreclose themselves out of business as the CAI lawyers have been exhorting HOAs to do over the years. 

 And by the way, what about all that abdication to the HOA attorney to run up attorney fees on homeowners facing financial problems, rather than advising the board to sit and negotiate a sensible payment plan?  What advice can be given HOA boards on how to negotiate a plan.  A failure to undertake this effort would raise questions as to the real intent of the above advice on accepting partial payments. A person may get the feeling that it’s just another attempt to keep at least a part of the attorney fees coming in, since these fees are generally the bulk of the money owed by the homeowner.  And they don’t go to help the HOA!  Don’t you think HOA attorneys should cut their fees, and help be a good corporate citizen?

 What do you say CAI attorneys?   What does your corporate conscience have to say?

 NOW that I’ve said the above,  let us not forget that the HOA has no legal standing in the lender/mortgage contract.  There’s really no reason for the lender to give away even more of its money in this short sale transaction.  The homeowner may still be personally obligated to the HOA for its past debts, but that’s no concern of the lender, is it? So why would it even care about the HOA’s attempt to negotiate a piece of the action?   And if the homeowner attempts to bargain for a larger piece of the pie to payoff the HOA, even partially, he risks losing the short sale.

 No, it appears once again that the CAI attorneys are silently ascribing de jure public government attributes as if the HOA assessments were indeed equivalent to taxes.  You know, taxes must be paid!  But, the HOA is not a recognized legal form of civil government.  It cannot claim such attributes; it cannot demand payment of assessments from the short sale.  Especially without even offering to be bound to the 14th Amendment as all public entities are subject. 

 So, I ask, what is the real motivation behind this interference into short sales advice?

Does CAI act in good faith for the benefit of the people in HOAs?

Arizona’s Augustus Shaw IV, only recently joining CAI’s College of Community Association Lawyers, was enjoined from running for state representative by a Maricopa superior court decision.  Shaw was found to live in District 20, but wanted to run in District 17, and having given a number of justifications for living in District 17 as opposed to District 20.   Now, it should be quite simple, even if you are not a lawyer, to know where one really lives, unless you are looking “to pull a fast one.”  See the Minute Entry, http://www.courtminutes.maricopa.gov/docs/Civil/062010/m4270712.pdf. 

Is this the caliber of membership in CAI’s self-proclaimed lawyer’s “honor” association?    What will CAI do, since it has a code of ethics, supposedly both for  members and a CCAL members?  I have not seen any evidence or documentation in my 10 years of watching CAI that any action was brought against a member or a CCAL member for violations of the respective codes of ethics

And what about those state legislatures and town councils that employ CAI as the official educator of HOA boards and property managers?  What will they do?  They should be watching for a strong indication that CAI  removes members not of good character and standing, and who display unethical conduct, especially if they are a lawyer.  Why?  Because state legislators have operated under a mistaken presumption that HOA boards will conduct themselves in good faith and obey the laws  —  even without any threat of punishment. 

But, the record repeatedly shows otherwise.  Abusive HOA boards ignore the laws knowing that homeowners will not go to court against the experienced HOA/CAI attorneys.  CAI, that powerful national lobbying trade group, has claimed over the years, before the legislators, that they speak for the homeowners, and what CAI argues is also what the homeowners want.  But, we know better.  Do you really think a homeowner wants his home as collateral for the survival of the HOA?  Or really agrees to being foreclosed on for a mere $200?  Or willing surrenders his right to due process in favor of HOA kangaroo courts?  Get real, legislators!  Get real! 

CAI proposes and supports HOA laws for its own self interest and does not deal in good faith.  The CAI attorneys act as hardnosed defense councils against the homeowner, and do not recognize a fiduciary obligation to the owners of the HOA, the homeowners.  They see it purely as a management vs. employee relationship, and they are on the management side.  CAI does not see, nor does it want ever to admit to any de facto government status, that the HOA is an authoritarian form of political government and an anathema to our democratic system of government. 

If CAI is really acting in good faith for the benefit of the people living in  HOA territories, it will seek the dismissal of Augustus Shaw from its CCAL.

Undemocratic HOA governments: Politburo federalization

I am not surprised by the silence to my Blogcritic article, ” HOAs: Unrecognized De Facto Local Political Governments ”   It takes time to absorb, since there is the shock that this is happening not in a European or third world country, but here in the US of A. 

In an email back in the summer of 2006, when first writing about the broader impact on constitutional principles by these private governments,  I had the analogy of the Communist Politburo in my mind.  I wrote, in regard to writing another article,

 I will allude to CAI as the modern equivalent of Communist Russia’s Politburo that, from its HQ in Alexandria, VA, has sent its faithful and loyal followers to every state legislature to undermine the American system of government. With less that 17,000 members, smaller than the members of the Arizona Assn. of Realtors alone, CAI controls public policy with respect to the homeowner association governance of condominiums and planned communities.  While its membership represents less than 6% of the homeowners associations in the US as estimated by CAI, its lobbyists control legislation with respect to HOAs in almost every state of the union.

 As added documentation as to where the promoters and supporters of the HOA legal scheme,  are taking us — those legal-academic aristocrats as I refer to them —   here is a real example of a “federal,” Politburo government in Arizona.  The governing structure of Anthem in Maricopa County, AZ, a master community contractual government, binding homeowners under the servitude law of constructive notice, is such a Politburo.  It has a federalized form of government, drafted in 1999 by longtime legal-academic aristocrat Wayne Hyatt, setting out a central government, the Anthem Community Council, ACC, (those socialistic terms) that has no members and is governed by a board of directors.  As the owner/declarant of all the properties to be known as Anthem, it unilaterally declared that,

 To pay for the Council Expenses, all Owners, through an Association or directly, shall be obligated to pay assessments, fees, and other charges as set forth in this Community Covenant . . . This Community Covenant shall be binding upon all Persons having any right, title, or interest in any portion of the subjected real property, their heirs, successors, successors-in-title, and assigns.

 The ACC further binds all property owners who are subject to an association governing a phased subdivision, as hereby subject to this ACC.  In other words, ACC is the federal arm, or more accurately, the Politburo, overseeing the resident-citizens of the Anthem territory and all Anthem subdivision “state” governments.

 BTW, have you noticed the socialist terminology?  In the various state laws, HOAs are called “planned communities”, and Anthem has a “community council,” and there’s the “communal living” aspect of HOAs (described as such by NJ Justice in the Twin Rivers case).  Yes, folks, right here in the good ol’ US of A, and nobody cares.  Not even any of the political parties, or public interest organizations, or the media.