Tag: CAI

Creating dysfunctional communities through HOAs

The current (Feb. 18, 2013) slogan on the Arizona CAI chapter website reads, “Creating Better Communities Through HOA’s”.  I find this statement to be entirely incredulous!  It dismisses the reality of an authoritarian regime that denies due process and the equal protection of the laws to homeowners. It asserts that kangaroo courts; the absence of fair elections processes; and a consent to the waiver and surrender of rights by the by simple filing of CC&Rs with the county without explicit, written agreement by homeowners all create better communities.

Such an attitude by pro-HOA lobbyist organizations is the primary cause that creates not better communities, but dysfunctional communities.  And from attorneys who proclaim to be experts on HOAs, but who clearly are ignorant of constitutional law.  (A leader of the AZ chapter is now president of CAI’s “best and brightest” lawyers group, CCAL). With the rapid growth of HOAs across the country, supported and encouraged by the state legislatures in all states, the HOA legal structure reflects values of the greater dysfunctional society that is becoming The New America of HOA-Land. 

The values, philosophies and standards of democracy set forth in America’s organic law — the Constitution, the Bill of Rights, the Articles of Confederation and The Northwest Ordinance of 1787 — are rapidly becoming a myth, but are still being taught in our public schools and misleading the people of America. 

Our elected representatives must restore our communities and society to those fundamental principles supporting our democratic system.  And that can be now with those HOA reforms bills now before your state legislature.

Why Homeowners Associations (HOAs) should and must be made political subdivisions

Simply stated, the following questions remain unanswered by state legislatures or HOA special interests:

1.      Can a legislature delegate its functions, not government services but functions, to private entities without oversight or compliance with the Constitution, as required of all government entities?

 2.      Can private parties enter into contractual arrangements using adhesion contracts and a constructive notice consent, which serve to regulate and control the people within a territory (an HOA), to circumvent the application of the Constitution?

Failing to address these fundamental questions has permitted HOAs to exist as de facto governments functioning as a second form of political government within the US. HOAs reject the US Constitution by their actions — forget the words.  Consider the following:

1.      “A rose by any other name is a rose.”  Taxes are HOA assessments; ordinances are rules and regulations; board is the legislature/city council; government agency is architectural control committee (ACC); citizens are members; judiciary is board/ACC; constitution is the CC&Rs; laws are the by-laws; etc.

2.      State legislatures have not enacted laws that delegate their legislative functions to the HOA private entities with oversight or constitutional compliance, as required by long standing legal doctrine. 

 [i]t is a well established theory that a legislature may not delegate its authority to private persons over whom the legislature has no supervision or control. . . .The legislature cannot abdicate its functions or subject citizens and their interests to any but lawful public agencies, and a delegation of any sovereign power of government to private citizens cannot be sustained nor their assumption of it justified.[i]

 3.      Furthermore, “Agreements violating constitutional provisions, county codes, and municipal ordinances are illegal to the same extent as agreements violating statutory enactments.”[ii]

4.      For those states with “home rule” laws that permit a wide range of independent law-making at the local level, the governing body remains subject to the constitution and laws of the state. 

5.      Attempts to enumerate the specific functions of an entity, which are unique to political governments and make them a government and not something else, like the archaic public functions test of 1946,[iii] fail as being contrary to constitutional law.  Compare these questionable definitive “public” functions to the legal requirements set forth in the laws of each state applicable to municipal governments.

6.      The unique factor that determines the broad concept of “government” is simply:  any governing body that controls and regulates the people within a territory is a de facto government. Take Cuba for instance, a de facto yet unrecognized government. Sadly, HOAs are not recognized either.

Modern states are territorial, their governments exercise control over persons and things within their frontiers. . . . A state should not be confused with the whole community of persons living on its territory [such as churches or corporations].[iv] 

7.      Several political scientists believe that HOAs should be declared as sui generis (one of a kind) private governments.  However, evidence based on existing HOA state laws have made HOAs an “arm of the government” (state actors) according to the US Supreme Court criteria:[v]   state protective statutes reflecting a cooperation with HOAs, through state support or coercion; by a symbiotic relationship, close nexus, or an entwinement between the state and the HOA.

In general, every special or private law which directly proposes to destroy or affect individual rights, or does the same thing by restricting the privileges of certain classes of citizens and not of others, when there is no public necessity for such discrimination, is unconstitutional and void.[vi]

8.      Defining HOAs as a sui generis entity without the requirement that HOAs are indeed bodies politic or state entities rejects the US Constitution. HOAs have seceded from the Union by virtue of their private contracts that do not hold the HOA governing body subject to the laws of the land. 

9.      CC&Rs are created by private parties, none being an actual member or resident of the subdivision at the time of formation, who enter into contractual arrangements that have been described by the courts as the HOA’s “constitution.”  The CC&Rs serve to regulate and control the people within a territory (an HOA), thereby circumventing the application of the Constitution and, specifically, the 14th Amendment equal application of the laws and due process protections. 

A statute infringes the constitutional guarantee of equal protection if it singles out for discriminatory legislation particular individuals not forming an appropriate class and imposes on them burdens or obligations or subjects them to rules from which others are exempt.[vii]

In order for a waiver of a constitutional right to be valid, it must be made voluntarily, intelligently, and knowingly and with sufficient awareness of the relevant circumstances and likely consequences.[viii]

 10.  The persistent and profuse arguments, by the HOA special interests, that HOAs are not governments can easily be seen as attempts to avoid HOAs being subject to constitutional conditions and restrictions that protect the people.  “In the context of community associations, the unwise extension of constitutional rights to the use of private property by members . . . .”[ix]

 

Further readings

Commentaries:                               

1.       The Legitimacy of HOA Governance

2.       AARP Amicus Curiae brief in Twin Rivers NJ constitutionality suit

3.       The Constitutionality of state protected homeowners associations

4.       Why haven’t the 1983 HOA problems of America II been resolved?

5.       HOA Case History: state actors or mini/quasi government

 

General reading:

1.       Beyond Privatopia: Rethinking Residential Private Government, Evan McKenzie, Urban Institute Press, 2011.

2.       Establishing the New America of Independent HOA Principalities, George K. Staropoli, Starman Publishing, 2008 (ISBN 978-0-9744488-3-1).

3.       Neighbors AT War! The Creepy Case Against Your Homeowners Association, Ward Lucas, Hogback Publishing, 2012.

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

5.       Villa Appalling! Destroying the Myth of Affordable Community Living, Donie Vanitzian, Villa Appalling Publishing, 2002.

                                               

Legal Authority Notes:

[i]    Emmett McLoughlin Realty v. Pima County, 58 P.3d 39 (2002).

[ii]   17A Corpus Juris Secundum Contracts § 213.

[iii]  Marsh v. Alabama, 326 US 501 (1946); Shelly v. Kraemer, 334 US 1 (1948).

[iv]  “State,” Black’s Law Dictionary, 7th Ed.

[v]    Brentwood v. Tennessee School, 531 US 288 (2001).

[vi] 16B American Jurisprudence 2d Constitutional Law § 874.

[vii]  16B American Jurisprudence 2d Constitutional Law § 871.

[viii]  16 Corpus Juris Secundum Constitutional Law § 82.

[ix]   Community Associations Institute (CAI) amicus curiae to NJ Appellate Court in CBTR v. Twin Rivers HOA, 890 A.2d 947 (2004).

High Noon in HOA-Land: members who permit lawless boards to function

Marshall Will Kane

Marshall Will Kane (left) throws his badge to the ground with disdain after defending Hadleyville, where the good people of Hadleyville stood by and did nothing.  (The 1952 movie, High Noon).

Some 60 years after the events in Hadleyville, thousands of HOAs follow in the footsteps of the Hadleyville townspeople and do nothing to rid their HOA of lawless rogue boards of directors.

How did this come to be?  Could it be like the townspeople, they FEAR reprisals from a lawless, vindictive and punitive board?  Could it be the indoctrination into obeying authority figures and the acceptance of imposed roles to conform to the group’s rules, right or wrong (See, “Why do people harm others in HOAs?”)?

Could it be a malaise, a general apathy as described in The HOA apathy affliction: a political dynamic and The role of the HOA apathy affliction in circumventing public policy on how the HOA lawyers work apathy in their favor?   While these acts describe a particular aspect of HOA oppression, in total, it must be understood that the pro-HOA laws (no punishment for board violations) and the unconscionable adhesion CC&Rs contract favoring the HOA contribute to the failure to develop a bona fide community spirit and a community centered civic virtue.

The development of a healthy community spirit and civic virtue are essential to eradicating apathy. Virtue can be defined simple as “conformity to a standard of right,” civic virtue as “a commitment to democratic principles and values,” and community spirit as “an involvement in and concern for one’s local community.”

CAI defines community spirit as having “pride in a community” and offers steps to produce this emotional identification: getting involved in activities outside the HOA, holding entertainment party and events, and becoming active in the community (Best Practices, “Harmony and Spirit”). No mention at all about civic virtue as a necessary part of creating a healthy community, and that a concern for the community must address issues of civic virtue. 

How can civic virtue and a healthy community spirit develop when the homeowner is placed in an environment and culture that opposes any such proactive activities?  As investigative reporter Ward Lucas points out in his new book, Neighbors At War!

Welcome to the weird world of HOAs . . . where life, liberty and property are in the hands of your neighbors, neighbors who are unconstrained by law . . . . That’s right!  These boards for the most part are not obligated to protect or respect any human or civil rights. . . . The very structure of Homeowners Associations gives them the ability to exert bully power on a completely arbitrary basis.

The apathy, the lack of HOA civic virtue, and the lack of a genuine, healthy community spirit that allow lawless rogue boards to violate the law and governing documents is the result of the above mentioned HOA legal structure and dynamic forces.  The legal structure of the HOA is secessionist, rejecting the principles and values of the US Constitution and Declaration of Independence for a fascist contractual government focused on maintaining property values. Where, as in fascism, individual rights, freedoms, and privileges and immunities guaranteed to all citizens do not matter. 

 

HOAs undermine our constitutional democracy!

HOA board mentality and unconscionable CC&Rs rewrites

Homeowners living in HOAs must decide what side of the fence they are sitting on!       Whether on the side of management or on the side of the rank and file homeowner?  There is a major difference as the HOA is not a democratic community government, but a corporate form of government.  And never has a corporate form of government been described as democratic.

The business parallel of “management vs. employees” in HOAs is alive and well. Management represents the HOA entity and not the members, just as management represents the stockholders and not the employees.  Legally this fact is found everywhere.  And the HOA attorney who advises the board and rewrites CC&Rs and amendments represents management and not the interests of the members.  How many times have you seen and heard “for a more productive and effective HOA” and “for the benefit of all members collectively”?   Sounds nice, but the two are not equivalent.  The board does not speak for all the members and that’s why there is member voting.

A most egregious and unconscionable act by the board and its attorney can be found in the broad rewrite of the CC&Rs where liberties are taken in favor of the HOA.  Where the homeowner again unknowingly waives and surrenders his rights and freedoms to the HOA, because the homeowner rank and file does not hire their own attorney to explain the impact of the HOA changes.

An example of how far this unconscionable activity can go involves the rewrite of CC&Rs by an Arizona CAI member attorney firm, and member of CAI’s College of Community Association Lawyers (CCAL).   In the rewrite the attorney deleted “reasonable” with regard to attorney fees and added “all”.  The attorney also did not adopt the “prevailing party” widely accepted standard of fairness, but mandated the homeowner to pay its fees regardless if the homeowner wins.  In other words, even if the homeowner had brought suit against HOA wrongful behavior and wins, he must still pay the HOA attorney fees.  Covenants that are unconscionable and against public policy are held to be invalid.

Additionally, a festering issue at the Arizona Legislature has been the awarding of attorney fees by the Office of Administrative Hearings (OAH).   The attorney uses the term “administrative law judge” as most homeowners would know that OAH does not pay attorney fees.  This blatant “squeeze it by and maybe they won’t notice” tactic is disgraceful.  Yet, in 99% of the cases heard at OAH the HOA has decided to hire the unnecessary attorney.  The HOA should pay for this unnecessary decision.

And yet many homeowners would go along with this “stick it to the homeowner” mentality.   Presumably because they see themselves not as the “homeowner” at issue, and therefore it doesn’t affect them.  But, the rewritten covenants apply to them, all of them.  And it also applies to the directors and officers who believe that this unconscionable conduct is good for the HOA in the long-term, and that it also doesn’t apply to them.  But, unjust and unfair covenants that openly serve the interests of their attorney cannot be seen as in the best interests of the HOA.

Homeowners in HOAs must decide where they stand.  For their rights or for unconscionable conduct and acts of bad faith by the HOA board and its attorney who is not your attorney.

CAI attorney stalwart defends HOA Land private constitutions and so-called bill of rights

The CAI stalwarts once again responding to my challenge to defend the constitutionality and legal status of the HOA legal scheme, including the highly questionable assertion of a “consent to agree” under the constructive notice doctrine.  This time, dedicated CAI stalwart Beth Grimm enters the arena with her August 2012 e-newsletter, What’s new in HOA Land . . .  The topic is, “Homeowners Bill of Rights.”

From the very start she informs her readers, in a round-about way, that there are no federal or state constitutions applicable to HOA private agreements.  I’ve been saying that for years!  And she points out that, “Without A Constitution What Is a Bill of Rights Worth?”  Grimm continues in what must be taken as a joke, in full agreement with the comment by Bill Davis, with a quote from Thomas Jefferson about the need for a bill of rights after admitting there is no HOA constitution.  

It appears that the reader is entering the realm of the attorney “word-game,”  where long established concepts and meanings are distorted to suit the attorney’s private agenda.  It’s an indoctrination and propaganda tactic. Welcome to Newspeak.

In strict legal terms, the assertion by Grimm that the governing documents are the HOA’s constitution is not correct.   But the courts have upheld the CC&RS as if they were just like a political constitution and interpreted them as a de facto constitution.  And as I have tried to explain, state laws like the California Davis-Stirling Act, the UCIOA acts, and other state HOA “Acts” serve as a parallel code of public laws applicable at the local government level to the class of nonprofit private governments called HOAs. 

The courts have also applied public government attributes, conditions and rights to these private contracts that are not contained in the explicit CC&RS covenants, and have applied overly broad interpretations as to what the members have agreed to without their signature – just by simply taking their deed in hand.  In other words, the activist courts are imputing a “consent to agree” that does not exist in the CC&RS. And nobody warns the unsuspecting homeowner of the consequences of reaching out for that deed. Nobody!

A host of reputed rights are then examined by Grimm, but they read more like the documents of the Rights and Responsibilities of members (a document first used to explain what a democracy is all about and how citizens are to act;[i] and a publication of CAI Central). It is in stark contrast to the preamble to the US Bill of Rights, emphasis added,

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.

This long time CAI stalwart attorney does not address the constitutional concerns raised in my The Truth in HOAs Disclosure Agreement, nor does she call for CAI to conduct such a poll. There is no support for my Declaration of US and State Citizenship. Grimm’s presentation misses this important point.

Nor does she mention that back in the 2008 – 2009 the California Law Review Commission’s attempt to rewrite the Davis-Stirling Act contained a proposed Chapter 2, Member Bill of Rights.  It was quickly removed and has not been adopted in the new law to become effective in 2014.  Nor does she present the homeowner advocates proposed homeowners bill of Rights published in the now defunct AHRC website and the AARP version written by David Kahne in 2006, among others.

It should be noted that in 2008 the Uniform State Laws Commission adopted a bill of right for UCIOA (UCIOBORA), but did not incorporate it was a part of UCIOA.  Rather, they created a separate version so that states can choose to adopt its so-called bill of rights or leave them out.  To date, no state has adopted this bill of rights.  It reads like your CC&Rs and pro-HOA state laws.  Nothing at all like the US Bill of Rights or the state Declarations of rights.

If HOA Land is to join the union and lose its independent principality status, thereby providing constitutional protections to the homeowners,  then Beth Grimm and all other CAI legal-academic aristocrats should be demanding the amendments to the Declaration  and state laws as proposed in my Declaration above,

The association hereby waivers and surrenders any rights or claims it may have under law and herewith unconditionally and irrevocably agrees 1) to be bound by the US and State Constitutions, and laws of the State within which it is located, as if it were a subdivision of the state and a local public government entity, and 2) that constitutional law shall prevail as the supreme law of the land including over conflicting laws and legal doctrines of equitable servitudes.

Why aren’t they?  The above state law and mandatory Declaration amendments will put an end to the jokes and word games that attempt to hide the fact that HOAs are de facto but unrecognized governments operating outside the Constitution. And there will be a bona fide Bill of rights!

 

[i] The Rights of Man, Thomas Paine, 1791; The Declaration of the Rights of Man and of the Citizen, 1793, French revolution origins)