Tag: CAI

Toward a democratic HOA subject to the Constitution

The news is good lately as several state legislatures have and are dealing with substantive HOA reform legislation that confronts the HOA legal structure as un-American. California’s SB 323 passed into law last year amid the hostility of CAI; Florida’s HB 623 is in the legislative process of becoming law; and Arizona’s SB 1412 is just starting out in the legislature.

The substantive amendments to state laws are:

SB 323 (CA) — seeks to introduce fair elections procedures for HOAs, addressing one of my 6 substantive defects in the HOA legal scheme.  Deborah Goonan’s excellent discussion of this bill[1] brought to my attention a second defect in the HOA legal scheme, the lack of enforcement of the law.

“A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association. . . . “A member who prevails in a civil action to enforce the member’s rights . . . the court may impose a civil penalty of up to five hundred dollars ($500) for each violation.”

HB 623 (FL) —

“This provision will amend 718 F.S. so any bylaws, or reasonable rules or regulations of the association which diminish or infringe upon any right protected under the Fourteenth Amendment[2] to the United States Constitution or Art. 384 II of the State Constitution and would be void and unenforceable without further action of the association. However, the provision states that the association may record a notice in the public records of the county in which the condominium is located evidencing its intention to not enforce such provision, it would foolhardy for them to do so. This has been overdue in our quest for achieving equal rights.”[3]

Much to my surprise Eric Glazer, of FL HOA & Condo Blog and host of HOA Condo Craze, warns of danger if HB 623 is made law.[4]

To simplify, the 14th Amendment made The Bill of Rights (The first ten amendments to the Constitution) applicable to the states.  So, this law basically says no provision of your governing documents can infringe upon the rights you have under the Bill of Rights.  All of you know several of these rights such as the right to free speech, freedom of assembly, and freedom of religion.

There is plenty of law out there that says when you move into an association, you may give up some of the rights you may ordinarily have in your private home. You do this by agreeing to be bound by the governing documents.

SB 1412 (AZ) — seeks to prohibit HOAs and condos from restricting political free speech. Members are permitted to associate, meet, discuss, show signs regarding political activity.

“NOTWITHSTANDING ANY PROVISION IN THE CONDOMINIUM DOCUMENTS, AN ASSOCIATION MAY NOT PROHIBIT OR UNREASONABLY RESTRICT A UNIT OWNER’S ABILITY TO PEACEFULLY ASSEMBLE AND USE PRIVATE OR COMMON ELEMENTS OF THE CONDOMINIUM IF DONE IN COMPLIANCE WITH REASONABLE RESTRICTIONS FOR THE USE OF THAT PROPERTY ADOPTED BY THE BOARD OF DIRECTORS. AN INDIVIDUAL MEMBER OR GROUP OF MEMBERS MAY ORGANIZE TO DISCUSS OR ADDRESS PLANNED COMMUNITY BUSINESS, INCLUDING BOARD ELECTIONS OR RECALLS, POTENTIAL OR ACTUAL BALLOT ISSUES . . . .”

I cannot emphasize that these bills have a very large umbrella covering many issues found at fault in HOAs. They provide the legal authority supporting many, many complaints, even those where the homeowner is just not happy with the way the HOA is run. In these cases, the HOA hasn’t really violated any law of the governing documents per se. The complaints should their focus on the lack of fair elections to remove wayward boards, or due process and equal protection of the law violations. The 14th Amendment applies!

What is needed is the strong support for the champions of these bills, Sen. Bob Wieckowski in CA, Senator D. Farnsworth in Arizona, and Representative Jason Shoaf in Florida. The California bill made law was achieved, in my opinion, with the help of the strong support of Marjorie Murray of CCHAL.[5] They fought and are fighting the system — state legislatures do not favor HOA reforms.

References

[1] “California HOA elections bill update (March 2019)”, Deborah Goonan, Independent American Communities.

[2] The 14th Amendment. Section 1 state prohibitions against laws denying due process of law and the equal protection of the laws, and abridging the privileges and immunities of citizens.

[3] Comment number 6, CCFJ.net, Milena Macias, Esq. (Feb. 4, 2020).

[4] “A PROPOSED AMENDMENT TO THE LAW THAT HAS DANGER WRITTEN ALL OVER IT”, Florida HOA & Condo Blog, Eric Glazer, Esq. (Feb. 3, 2020)

[5] Center for California Homeowner Association Law.

 

 

 

 

HOAs are in need of a major restructuring

Whether you like your HOA, or dislike your HOA, is immaterial. It’s all about the Constitution and the HOA legal scheme. What matters is whether the HOA legal structure is a danger to the country, because it will happen again. And none of us can have confidence, based on the historical record, that it will not happen again because . . . every day it is allowed to continue at will.[1]

It is well past the time for a restructuring of the HOA model of local government formulated some 56 years ago by ULI in 1964 — The Homes Association Handbook. In 1973 CAI was formed to deal with the persistent problems facing the HOA model, and in 1992 CAI was forced to change its educational tax-exempt status to that of a business trade group in an attempt to deal with the continued problems with HOA.[2] In 2005 it had to drop HOAs as a member due to conflicts with the purpose of a business trade group — HOAs are consumers of CAI services.

These HOA problems and issues are endemic to the legal model of unconstitutional, private governments as a result of the intents and motivations behind the introduction of HOAs: to make $$$ by means of a mass merchandising effort.[3] Constitutional considerations were ignored and avoided by focusing on the legalities of real estate law and equitable servitudes to justify the legal authority over the HOA members. The policy makers have failed to understand that the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.

There is no denying that the HOA subdivision managed by competent boards and professionals appeals to the desires and wants of home buyers and bring many benefits. It comes as no surprise that the vast majority of persons living in an HOA approve and love their HOA, finding only minor problems with the board of directors or HOA managers. The annual “satisfaction” surveys produced by the pro-HOA trade group, CAI, reflect this positive attitude.

However, the HOA legal structure and scheme is authoritarian in nature: strong central power, limited political freedoms, no accountability, and under the rule of man, not law.

But the HOA is truly a totalitarian democracy. A totalitarian democratic state is said to maximize its control over the lives of its citizens by using the dual rationale of general will (i.e., “public good”) and majority rule.[4]

Prof. McKenzie wrote in 1994: “HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.”[5] The authoritarian nature of HOA-Land is masked by a thorough indoctrination that presents a false picture of the real estate subdivision as democratic, inappropriately named a community, simply because the members are allowed to vote, as meaningless as it is.

The HOA danger to the Constitution has been presented in several Commentaries herein, and in the white paper found in the book, The HOA-Land Nation Within America.[6]

There is no denying that the HOA subdivision managed by competent boards and professionals appeals to the desires and wants of home buyers and bring many benefits. However, as this whitepaper addresses, the means to this end are highly suspect and harmful to our democratic system of government.

StarMan Group, HOA Management Consulting, offers a program to resolve many of the substantive defects with HOAs by means of the complete restructuring of the model: a program of organizational development. It also requires the removal of the adverse influences by the CAI School of HOA Governance as I collectively refer to CAI’s policies, best practices, guides, communications, seminars and certifications, and in its Manifesto.[7]

consulting SIG image1

References

[1] Rep. Schiff’s (Rep. Adam Schiff is the leading Democratic impeachment prosecutor), opening argument Friday, Jan. 24, 2020, appealing to the Senators to uphold the Constitution. “Whether you like the president, or dislike the president, is immaterial. It’s all about the Constitution and his misconduct. What matters is whether he is a danger to the country, because he will do it again. And none of us can have confidence, based on his record, that he will not do it again because he is telling us every day that he will.”

[2] See in general: Evan McKenzie, Privatopia: Homeowners Associations and the Rise of Residential Private Governments, Yale Univ. Press, 1994; Donald R. Stabile, Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing (funded by CAI and ULI).

[3] See in general, “Analysis of The Homes Association Handbook,” George K. Staropoli (2006).

[4] George K. Staropoli, The HOA-Land Nation Within America, p. 22 (StarMan Press 2019).

5 Supra n. 2, Privatopia.

[6] Supra, n.4, p. 4.

[7] Community Next: 2020 and Beyond (May 5, 2016).  A manifesto is a public declaration of intentions, opinions, objectives, or motives, as one issued by a government, sovereign, or organization. A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing body’s philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.

 

“Rules of Engagement” apply to CAI

Many may feel from all my criticism that I unjustifiably have it in for CAI.  Well folks, you decide whether the CAI propaganda statements and publications that are PR releases is in conflict with its numerous acts before state legislators and the courts.  These contradictory stances are revealed in CAI’s amicus briefs — what I say I don’t do [1].

Advocates have failed to apply the Rules of Engagement to such Doubletalk[2] from CAI allowing the legislators, the media and the BODs to see no evil, hear no evil speak no evil.  These Rules are a very important weapon to discredit CAI and stop the policymakers from trusting their misleading statements; to start believing in the validity of the positions and arguments for HOA reforms coming from homeowners and homeowner advocates.

As a prime example, and there are many others found in the numerous CAI briefs dealing with constitutional HOA issues, is the NJ Supreme Court case in Dublirer.[3] It involved the free speech rights of a homeowner to equal access the HOA facilities in order to distribute BOD election materials to his neighbors – an exercise of his rights in a democracy. Allow me to repeat my quotes[4] from CAI’s NJ Supreme Court amicus brief in Dublirer.[5]

CAI-NJ’s concern is the attempt to convert private communities into constitutional actors and to open such communities to access not only to speakers from within the community but also to the public, while ignoring contractual agreements and non-constitutional protections.

The relationship between the plaintiff and the defendants here is that of a business corporation and so is similar to that involved in any other business corporation. A shareholder who wishes to run for a position on a corporate board has no right to post campaign signs on the corporation’s property. . . . He has no constitutional right to distribute his campaign materials within the cooperative’s property simply because mailing them to the other tenant/shareholders may cost him money”.

In plain English, this is secessionist and a rejection of the Constitution. CAI’s position says the people in an HOA will decide what laws to follow or not to follow. It is an incredulous statement from the organization that claims to be the one and only voice on HOAs, but apparently does not understand or simply ignores constitutional law. The CAI position is in opposition to the  long-standing legal doctrine on the delegation of legislative (lawmaking) powers to private persons.

In order to win, advocates must muzzle CAI’s lack of “candor to the tribunal.”[6]  Judicial and legislative  doctrines hold that an allegation or argument that goes unanswered is held to be true.  That’s why, it seems, advocates are viewed as unbelievable,  because of their repeated silence resulting from a lack of knowledge on how to respond.  This must change!

 

References

[1] See in general, Will the real CAI standup: its contradictory beliefs, pronouncements and goals.

[2] From George Orwell’s novel, 1984, where a person holds two contradictory statements at the same time.

[3] Dublirer v. 2000 Linwood Avenue,  103 A.3d 249 (NJ 2014).

[4] See my Commentary for additional quotes: CAI: the HOA form of government is independent of the US Constitution.

[5] Dublirer CAI Amicus.pdf.

[6] Attorney Rules of Professional Conduct, Rule 42, E.R. 3.3

CA SB323 a model on fair elections for all states

California’s SB 323 seeks to introduce fair elections procedures for HOAs, addressing one of my 6 substantive defects in the HOA legal scheme.[i]  Deborah Goonan’s excellent discussion of this bill[ii] brought to my attention a second defect in the HOA legal scheme, the lack of enforcement of the law[iii].

The bill modifies California’s Civil Code, Section 5145(a), inter alia, mandating a court to void any election found to violate the law. The court no longer has discretion, as many have been found to favor the HOA over the member, and insures that justice be served. “A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association.”

Section (b) is modified to read, “A member who prevails in a civil action to enforce the member’s rights . . . the court may impose a civil penalty of up to five hundred dollars ($500) for each violation.”

In all fairness, the bill requires the violation to be intentional and material to the outcome to avoid frivolous suits.  With CAI “experts” in HOA law involved in many of these cases, it’s hard to view the violation as accidental.  There is an instance in Arizona at this time where this bill is sorely needed.[iv]

Without fair elections, all this pro-HOA clamor by CAI and other staunch HOA backers that HOAs are the epitome of democracy where members can vote, and should get elected and involved in the affairs of their HOA becomes meaningless tripe!

California’s SB 323 must be made law not only in California, but in all the states as well!

References

[i] See HOA Common Sense: rejecting private government, Democratic elections, No. 5.

[ii] See “California HOA elections bill update (March 2019)”, Independent American Communities.

[iii] Supra, n. i, HOA Boards can do no wrong, No. 7.

[iv] For example, see “Non-conforming HOA voting procedure”,  HOA Constitutional Government.

California’s SB 323 seeks to introduce fair elections procedures for HOAs, addressing one of my 6 substantive defects in the HOA legal scheme.[i]  Deborah Goonan’s excellent discussion of this bill[ii] brought to my attention a second defect in the HOA legal scheme, the lack of enforcement of the law[iii].

The bill modifies California’s Civil Code, Section 5145(a), inter alia, mandating a court to void any election found to violate the law. The court no longer has discretion, as many have been found to favor the HOA over the member, and insures that justice be served. “A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association.”

Section (b) is modified to read, “A member who prevails in a civil action to enforce the member’s rights . . . the court may impose a civil penalty of up to five hundred dollars ($500) for each violation.”

In all fairness, the bill requires the violation to be intentional and material to the outcome to avoid frivolous suits.  With CAI “experts” in HOA law involved in many of these cases, it’s hard to view the violation as accidental.  There is an instance in Arizona at this time where this bill is sorely needed.[iv]

Without fair elections, all this pro-HOA clamor by CAI and other staunch HOA backers that HOAs are the epitome of democracy where members can vote, and should get elected and involved in the affairs of their HOA becomes meaningless tripe!

California’s SB 323 must be made law not only in California, but in all the states as well!

References

[i] See HOA Common Sense: rejecting private government, Democratic elections, No. 5.

[ii] See “California HOA elections bill update (March 2019)”, Independent American Communities.

[iii] Supra, n. i, HOA Boards can do no wrong, No. 7.

[iv] For example, see “Non-conforming HOA voting procedure”,  HOA Constitutional Government.

Rigged HOA elections create a false democracy

Long ago in 1994 Professor McKenzie wrote, “HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.”[i]  There is no better example of HOA independence than prejudiced HOA election procedures.  In 2013 I wrote,

“HOA members have been repeatedly told that they can change things in their HOA by voting for board members and even by changing the governing documents; that HOAs are democratic because members can vote to make these changes happen. . . . Without fair elections procedures that contain enforcement against HOA board wrongful acts, including retaliatory acts and intimidation by the board, voting in an HOA is a mockery of democracy.[ii]

CAI, on the other hand, maintains in its Public Policy statement that,

“Community associations are one of the most representative and responsive forms of democracy in America today. Residents of a community freely elect neighbors to serve on the board of directors of the community.[iii]“

Let me give a prime example of far these pro-HOA procedures can go to deny members a fair and just voting process, one that subtly favors the HOA Board.  In this large scale HOA in Arizona with over 9,000 homes and some $20 million in revenues, amendments to the CC&RS and bylaws are needed to be approved by 67% of the membership.

The governing documents have an unusual, non-standard voting procedure that allows for “consent” by the members, in addition to an actual vote, which constituts a vote and are counted in the approval requirement. Members just have to fill out a form and submit it.  Surprisingly, in contrast to the public voting procedures, this procedure contains

  • no mention of a “cutoff date,” the date that the Consent Form needed to be received by the election committee. A start date, date form first distributed, is mentioned and currently is 5 months ago.
  • no opportunity for a “no” vote, just the wording that not submitting the form would be seen as choosing “ not to consenting to the documents.”
  • A biased, pro-HOA “advertising” on the form itself without any mention of opposing views. “ Moving Forward to the Future.” Other advocacy by the Board is prominent.
  • An annual membership meeting scheduled some 6 months after the ability to submit a Consent Form, but the agenda was silent on actual voting for these amendments instead of submitting a Consent Form, or announcing the results of the “vote.”

This method of voting by the HOA would not pass muster in the public realm.  So much for democracy in action. This election process is rigged in favor of approval, is unjust and negates any choice by the members who may wish to submit a NO vote.  It’s a no-lose approach for the Board since the Form does not allow for NO votes!  It would never fly under the public realm’s fair elections requirements.

In Wittenburg v. Beachwalk HOA,[iv] the California appellate court held that a board is engaged in advocacy when it supported and  urged an approval vote in its materials and communications. The Court’s view was that opposing parties must be given equal opportunity to advocate against the proposition, which is being denied in the above instance, by not allowing a no vote and the open-ended voting process of form submissions with only YES votes.

The Court held that the relevant statute was in the public interest and it sought to

“provide substantial new voting protections” to members of homeowner associations designed to “guarantee that basic democratic principles are in place during elections,” which had previously been “contaminated by manipulation, oppression and intimidation of members, as well as outright fraud.”[v]

Yet, overwhelmingly, according to the CAI surveys, HOA members standby their HOA even though it operates outside of constitutional protections and the laws of the land.  They seem to believe that, like a King, their board can do  no wrong; that, contrary to James Madison’s view that “If angels were to gvern men, neither internal  nor external controls on government would be necessary,” their board must consist of angels.

The HOA legal scheme as set forth in the governing documents and pro-HOA state laws, does not contain a fundamental principle of our constitutional system of government:  checks and balances. The HOA board basically has, for all practical purposes, a free hand to function as an authoritarian government.

By: George K. Staropoli

 

References

[i] Evan McKenzie, Privatopia: Homeowners Associations and the Rise of Residential Private Governments, Yale Univ. Press, 1994.

[ii] “Democratic Elections No. 5,” George K. Staropoli, HOA Common Sense: rejecting private government.

[iii] Section 8 in An Introduction to Community Association Living (2006).

[iv] Wittenburg v. Beachwalk HOA,  217 Cal.App.4th 654 (2013).

[v] Id.