In my view after 13 years dealing with HOA attorneys, and especially those who are members of CAI across the country, they are lawyers first and foremost and not advocates for a cause. They deal with the laws and statutes and CC&Rs as they are, having had a profound role in their creation.
An advocate fights for a cause, or at least, for justice and fair play against unjust, unfair and illegitimate laws. He sees a societal wrong and seeks to redress these ills of society. The HOA attorneys defend private corporations without a moral or ethical perspective, as they insist is the law. They do not concern themselves with the de facto acts of HOAs as private governments. Therefore, under the CC&Rs contract, concern for individual rights and freedoms, those basic American values, are of little importance.
Over the years I’ve seen attorneys cross the line and act in collusion with the wrong-doing of HOA boards, even advising how “to deal with the new laws” that grant homeowner rights and freedoms. They have proposed suggestions that are in keeping with the letter of the law while openly unreasonable and designed to give the homeowner a “hard time.” A prime example, offered by the current president of CAI’s College of Community Association Lawyers (CCAL), in his guidelines[i] on videotaping board HOA meetings, as permitted by Arizona’s ARS 33-1248 and 33-1804.
I’m sorry, but I must admit that my opening statement above is wrong. The CAI HOA attorneys are indeed advocates, advocates for HOAs under the banner, as stated on CAI’s home web page “Building Better Communities”[ii] and “responsible citizenship.” The banner is quite explicit as stated on the Arizona chapter’s web page, “Creating Better Communities Through HOA’s”[iii] (sic).
When their acts and actions before state legislatures are contrasted with their lofty public relations materials, the average person gets a clear picture of the better America being advocated by CAI attorneys. It’s an America not based on the basic American values that created this great nation, but on authoritarian private governments permitted to operate outside the protections of the US and state constitutions. And those protections were established to protect the rights of the people, and not private governments.
In contrast to the intents and purposes of HOA “constitutions,” America took pains in its Constitution to protect individual rights and freedoms:
THE Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution.[iv]
[ii]Celebrating its 40th anniversary in 2013, CAI provides information and education to community associations and the professionals who support them. Our mission is to inspire professionalism, effective leadership and responsible citizenship. (http://www.caionline.org/Pages/Default.aspx, July 21, 2013).
This video covers the Arizona Senate GE committee hearing on a bill that would allow unlicensed HOA managers to represent HOAs. It shows the AZ legislature abdicating and supporting HOA-Land rule over democratic rule, and over the Constitution. It shows a banana republic, “I see no problems,” mentality.
Here are my comments at several points in the video.
My opening statement
Hi, I’m George Staropoli, also known on the internet as HOAGOV. I am once again, reluctantly, before the camera with another HOA legislative documentary. My material comes from events at the Arizona Legislature, and from the legislators themselves.
Viewers will be alerted to the following comments at appropriate points in the video. They are provided to assist you in understanding of what’s really going on. With this in mind, I strongly recommend that you take time to read my HB 2371 Commentary (on this date) on my website before continuing — the link is now being shown.
This video will also be posted to my HOA Constitutional Government website along with my detailed comments — the link is on the screen.
Let’s view the hearing . . .
Opening comments by Ugenti:
You just witnessed the sponsor’s “opening statement.” Note her motive for the bill: Let me quote her, “Every year there is a plethora (many, many) of personal HOA legislation . . . as well as industry HOA legislation.” She stated that she combined all those bills “working through a stakeholder process and allowing the stakeholder process to filter the proposed legislation . . . representing a consensus from the AZ realtors, and AACM (AZ Association of Community Managers, the beneficiary of this bill).” She further added “to spare the members from the agony of voting up or down on personal pieces of legislation.”
Now, what was she saying? First the “personal” bills come from homeowners while the other legislation is “HOA industry legislation.” She put the bills through a stakeholder process and used the process to filter the bills. She failed to say, however, that no homeowner advocates participated in this stakeholder filtering process, which was brought to light in her House GOV testimony, and not denied.
Ugenti said nothing about fixing HOA problems and making HOAs better for everyone, especially the real stakeholders — the homeowners. Not even entertaining an amendment to address issues of substance relating to constitutionality, fair and just laws, and of other homeowner concerns as emailed to her.
Now let me explain that in her earlier statement to the House GOV committee, she also said that she wanted to avoid any controversial bills. But, think about it. If there is serious opposition, based on authoritative sources, wouldn’t that that create a controversy? So, her choice was to deny any opposing views, and only pick the special interest agenda – the stakeholder agenda. Isn’t Ugenti failing to understand that these problems are not singular or personal to just one homeowner? I mean, after hearing more of the same from others and the media, you would think she could take a hint! Apparently not!
Homeowners appear to have been given short rift, and have been placed “at the bottom of the food chain,” defenseless and being gobbled up by everyone else. And here I thought our representatives are supposed to represent the people, not the moneyed special interests.
Art. II, Sect. 2, of the AZ Constitution states, “Governments . . . are established to protect and maintain individual rights.” Did I miss something?
Furthermore, in an outright act of favoritism toward the special interests, as shown in the video, Ugenti asked for questions that she or the stakeholders can answer.
Let’s return to the video . . . .
Homeowner email:
Please understand what has happened in this staged scenario with this constituent email, which the legislators viewed as having a “personal issue” with her association — homeowner owners only bring personal problems while the special interests deal with non-personal agendas.
With the several email dealing with issues and problems of substance, why was the single email chosen for airing before the committee? Why? Because it serves to reinforce the sponsor’s false argument that homeowners only deal in personal issues, which justifies her leaving out the homeowners from serious, authoritative HOA industry specialists! There was no mention of the non-personal, substantive constitutional issues brought to the attention of the legislators in my emails and commentary, or in two other homeowner advocate emails that I have personal knowledge. Nothing! Silence! Not a word!
The legislators “hear no evil, see no evil, and speak no evil.”
Let’s return to the video . . .
Conclusion
You have now witnessed another episode of “the unspoken alliance of no negatives about HOAs.” Did you hear any of the objections that were emailed to the committee? NO! You did not hear that the bill would allow unlicensed HOA property managers to represent HOAs in small claims court, or before an administrative law judge at the Office of Administrative Hearings? Did you know that even licensed paralegals are not allowed to represent others? Did you know that the current law applies to all hearings from all agencies before OAH?
Don’t tell me that the legislators, AACM, CAI, or the sponsor of HB 2371 don’t know about the 2012 AZ Supreme Court opinion on HOA managers engaged in the unauthorized practice of law, and the decision against for numerous UPL violations against one CAI/AACM member? C’mon! The legislators were sent copies of these decisions. The viewers of the hearing video would not think any such events against unlicensed mangers had occurred. In court, hiding exculpatory evidence (evidence in favor of the defendant) is a crime! But, apparently it’s OK in the legislature.
And rather than do what is just, fair and reasonable, and that is to require proper licensing for managers if they are being allowed to represent HOAs, HB2371 is silent on education!
What we have here is a special law for special private entities, without even a whisper of any legitimate justification. The bill is an unconstitutional special law violating the AZ Constitution, ART II, section 13, which states, “No law shall be enacted granting to any citizen, class of citizens, or corporation other than municipal, privileges or immunities which, upon the same terms, shall not equally belong to all citizens or corporations.” In other words, no special laws for special people are permitted.
Section 32 states, “The provisions of this Constitution are mandatory, unless by express words they are declared to be otherwise.” Where are the “express words” in this bill to override the Constitution?
What you have witnessed is the homeowner, the real stakeholder, has been cut out from the legislative process. What we have here is legislative support, cooperation, entwinement, and a symbiotic relationship between the state and the HOA, thereby making good cause for HOAs to be declared arms of the state, or state actors, subject to the 14TH Amendment protections.
It must still pass the Rules committee and the final vote of the entire Senate before becoming law. Passing this bill into law would be unconscionable!
This post takes a closer look at some of the provisions of SB 596 with its intent “that the powers and authority granted to homeowners’ associations . . . conform to a system of checks and balances in order to prevent abuses by these governing authorities.” At the request of then Rep. Julio Robaina I testified at the Feb. 23, 2008 all-day legislative HOA hearing in Tampa, FL. Public domain clips from this hearing, several of which can be found at the HOAGOV YouTube website, clearly show why checks and balances are sorely needed.
Aside from the introduction of effective enforcement provisions, the other changes of substance deal with regulating the conduct of what the HOA “can and can’t do.” They are the payment of assessments, elections and proxies voting, and transfer of declarant control.
These substantive changes take the first 17 pages of the bill and is followed by non-substantive changes to 720.3024 creating the Ombudsman office and election monitoring, and HOA Study Council (720.3025). The other substantial changes include: Section 720.3085, the “pay or die” section (my words), Section 720.306 dealing with meetings and substantial revisions to the elections and proxy voting processes, and changes to 720.307 relating to the transfer of power from the declarant that takes us to page 40 and the subsequent technical changes.
First, I will look at what I call the “pay or die” statutes regarding the continued payment of assessments even when payments are being disputed (720.3085(9)). “Pay or die” meaning that if any homeowner doesn’t pay his assessments in a timely manner the HOA will die mentality. I find this reprehensible, approaching an indentured servitude condition, and demonstrating a “close nexus” and a “symbiotic relationship” between the HOA and state, a “You do for me and I will do for you” relationship. This statutory requirement to pay or else is sufficient alone to have the HOA declared a state actor! Especially when the statutes also permit the HOA to deprive is member-residents of their rights, freedoms, privileges and immunities as citizens under the 14th Amendment.
However, the bill at least moves forward with checks on the unilateral foreclosure powers of the HOA. It forces the HOA to prove the correctness of its claim, allowing the court to issue equity judgments that the HOA can’t add right, had sent the notices to the wrong address, refused to cash checks and/or held them past the deadline before cashing in order to demand late fees, just to name a few of the abusive practices.
Read the new subsection 720.3085(9) carefully. A dispute of the amount would only require deposits of assessments during the legal action, and not the disputed amounts. The term “disputed” needs to be clarified to include abuse by the HOA as mentioned above and not limited to just amounts. Of course, the justification for clauses (d) and (e), the HOA will die clauses, can be debated.
There are some issues with proxy voting (720.306), but the changes in the bill will serve the homeowners well. Subsection (9) deals with board elections and restricts members who are in arrears to the HOA cannot run for office. That’s fair. If a member cannot vote if he is in arrears, a member in arrears should not be allowed to hold office. Co-owners cannot both serve on the board, which give that unit excessive power. I find the requirement to certify knowledge of the governing documents 90 after an election as preposterous and pro-HOA. Want to be on the board? Get educated first!
In regard to the transfer of power changes added in the bill serve to benefit the homeowner. While not completely airtight, the term “in the ordinary course of business” would restrict the declarant from sitting on lots in order to retain control. What is missing, as just occurred in Arizona, is the declarant’s modification of the governing documents before turning over its power to lock him in place for all practical purposes. The usual introductory phrase, “notwithstanding anything in the governing documents to the contrary” should be added to the bill.
As for my views, the inclusion of effective enforcement authority overwhelming outweighs any concerns that I have mentioned above.
Understand what a YES vote means for Terravita and your image as a citizen
Summary
The writer provides an example of how HOAs create a dysfunctional, un-American community, using arguments against the adoption of CC&Rs amendments on two occasions by the Terravita CA in Scottsdale, AZ. In the first instance, amendments that violated Arizona statutes in regard to the content of the ballot were approved in 2010. One non-disclosed amendment made significant reductions in the requirement for adoption of future CC&Rs amendments, from a supermajority vote to a minority vote. (In 2011, the Legislature defeated a CAI drafted bill that would allow for minority control of HOAs).
The current amendment reflects an undisguised intent to punish one member for filing Office of Administrative Hearings (OAH) Petitions against Terravita. Attorneys are not awarded fees at OAH because they are not required, yet the poorly constructed amendment removes attorney fee awards in civil court actions. As a result of the approval of the non-disclosed “minority control” amendment in 2010, a minority of only 307 out of 1380 votes will be required to adopt this Board approved punitive amendment.
Without any prior open discussion or debate, the distributed Absentee Ballot is one-sided in favor of the Board without opposing arguments. Adopting these amendments by a minority of members reflects an un-democratic and dysfunctional culture within Terravita. The objectives of the “corporate state” are primary and individual property rights are secondary. Members are urged to reject the amendments.
I let the Arizona Legislature know that advocates are not as stupid as they would like to believe (See Observations on AZ legislative treatment of HOA reform bills We know what is going on and has been happening for years with respect to legislative support for private government HOA regimes. HOAs that deny homeowners their rights and freedoms while imposing harsh penalties only on the members and not on the HOA boards.
The attitude of the legislatures appears to be: The HOA must survive at all costs – it’s a matter of national and state security so constitutional protections be damned.
A leading Texas advocate has added to this exposure of legislative cooperation, support, and coercion to permit HOAs to rule without accountability. Read her Open letter.
There are 4 main constitutional issues that are continually ignored by the legislatures: clean elections procedures; due process and the equal application of the laws; ‘consent to agree’ fallacy; and that the Constitution is only about ‘no contract interference.’ These issues must be addressed and reforms instituted, but they are not addressed because the legislators well know that they are defending the indefensible if they speak out.
It falls to the true advocates for HOA reform to have the courage to speak out about the reality of the HOA legal concept. They need to set the record straight about legislation supported and promoted by the so called “stakeholders”, the vendors (read as HOA attorneys and managers) who make money from the unrepresented and truly affected class, the private property owners, the homeowners.
HOA Constitutional Government 