Tag: CAI

HOA foreclosure rights — in-depth discussion with CAI’s CEO and Berding

An excellent news feature from CNBC on HOA foreclosures including CAI’s Tom Skiba and attorney Bill Davis, who is the fellow being sued by John Carona’s corporate entities has been posted on Evan McKenizie’s The Privatopia Papers blog.  See The next foreclosure fight, redux…

An amazing 32 comments in two linked threads have been posted by interested persons including, among “anonymouses,” Evan McKenzie, Tom Skiba (CAI CEO), HOA defender Tyler Berding, Fred Pilot, Fred Fischer,  and yours truly, G K. Staropoli (PVTGOV).  Where are you other guys?

The issue of HOA foreclosure rights is covered quite extensively from several points of view.  If you want to be in the “know”, you must read these comments to better understand the lunacy of “they signed an agreement to pay assessments” and “it ain’t fair for good owners to pay for  these people.”

Get your voice heard.  Send this Privatopia link to your state repesentatives today!

 

Where is the justice? AZ court gives HOA a “do over”

In Pinnacle v. Derailed (CA_CV 10-0604, Ariz. App. Div. 1, May 31, 2011) , the HOA objected to a sculpture because the homeowner didn’t get ACC approval. As we’ve seen many times before, the homeowner replies, “Show me where I must get to ACC approval when the governing documents are silent on the issue?”

The HOA attorney, CAI member and “defender of the faithful,” Scott Carpenter, made the following arguments, among others,

The [HOA] letter asserted without elucidation that the “governing documents prohibit this type of sculpture.” (Emphasis added.) Derailed responded that if the sculpture constituted a violation, many other violations were visible on neighboring properties and declined to remove the sculpture. . . . counsel cited Article 1, § 15 of the CC&Rs, which requires Committee approval of “all landscaping plans.”

The trial court, having reviewed the definitions of “landscaping, and in the absence of a “redefinition” of landscaping in the governing documents, held that sculptures are not part of the meaning of landscaping. The court, siding with the homeowner, wrote

the governing documents did not either require Derailed to seek approval for a sculpture or prohibit a sculpture. The court also found that the sculpture was neither “landscaping” nor a “structure or dwelling” and that the Association had not argued that it was an unsightly object.

The appellate court refused to “read tea leaves” and divine meanings not set forth in the governing documents, “we also “should not give a covenant a broader than intended application.” Carpenter then tried to argue that a sculpture was a structure, and that it failed to meet architectural designs. Both rejected. But, Carpenter failed to argue that the sculpture was unsightly, perhaps, if true, would have been a grounds to not allow the sculpture. “The Association did not characterize the sculpture as “an unsightly object.”

However, the court became activist and wanted a “do over” as it felt some issues weren’t considered by the trial court and it wanted the court to consider them.. A “do over”, a second “grab at the apple.” On legal “technicalities”, once again, the appellate argued that Derailed failed to object to Carpenter’s raising the issue of “unsightly” and claiming that Carpenter had “waived” this argument. Consequently, the issue of “unsightly” can be considered by the appellate court. In other words, Derailed did not argue that it was not an issue before the trial court and cannot now be considered at the appellate level. (I can’t count the number of times I mentioned that the homeowner must respond to all charges and claims made by the HOA, otherwise it might come back and bite them in the ass, like now.)

It should be noted that when the court asked at oral argument “which provision of the governing documents authorized regulation of sculptures”, Carpenter “cited Article 1, § 15 of the CC&Rs” and made no reference to Rule 2.28 of the ACC that pertained to “unsightly object.”What happened to“we also should not give a covenant a broader than intended application?” I guess the denial of the motion for reconsideration amounted to a bona fide trial court argument. And the court wanted an answer to the “unsightly object” issue that was not brought before the trial court,but apparently brought before the appellate court.

It seems that the court has leaned backwards to compensate for the failure of the HOA to specifically raise the question of “unsightly” at the trial level. How many times have I wondered what if these judges really sought to do justice and interjected themselves on behalf of the homeowner and said, in effect, “Hey boy, ya’ didn’t raise this valid and potentially winning issue of … So I’m sending it back to the trial court. Got my drift?”

As an aside, In March 2010 I spoke with the owner and, anticipating the HOA’s defense, I asked about the sculpture, “Was it acceptable”? He replied that it was the work of a known sculptor. I wonder how the trial court would decide? How much would it cost the HOA for Carpenter to pursue this uphill fight on “unsightly objects”?

As a second thoughtdid the court issue a memorandum and a restriction on the case being published and made a precedent? Generally, this occurs when the court feels no new opinions were made to serve to guide future cases.

CAI already spreading the fear of raised DFBLS fees for HOA disputes

In Scott Carpenter’s video seminar on 2011 Changes in the law for Arizona, May 23, 2011, Carpenter speaks of the possibility of raising the “steep” fees at DFBLS. He states that “in speaking with the people at DFBLS, they are considering changes in the fees” to meet the requires of the law that HOA adjudication fee would cover all costs.

 

The DFBLS website already has wording, “Filing fee amounts are to be determined.”

See more at  AZ DFBLS seeking to raise HOA fees already??

HOA Syndrome survey: YES, it exists!

The CBS TV Phoenix affiliate, KPHO reporter asked in its HOA Syndrome coverage, What could someone do to escape the HOA Syndrome? The only answer provided as to “move out”.

That was a completely unsatisfactory solution! In a hearing on HOA reform bills in this past session, a legislator stated that 94% of all new homes was in an HOA. A completely unsound solution not based on the facts.

Furthermore, it rewards the guilty parties. The government was not called upon to do something to stop this disgraceful condition in what the government continues to tout as “the next best thing to Mom’s apple pie.” There was no call for the immediate adoption of a consumer advisory like a Truth in HOAs Disclosure Agreement. There was no call for ADRE, the real estate department, to enforce its rule on material disclosure, R4-28-1101. There was no call for the Legislature to enforce HOA laws and to hold the HOA accountable under the laws, so homeowners can feel that there was someone on their side. That there was a viable method to ease the pain. KPHO offered no such call except to “move out.”

HOA SYndrome survey

KPHO’s internet survey, “Question of the Day,” asking whether the Syndrome does really exist has received, after 24 hours, a steady 67% YES replies from respondents. Perhaps this will be an awakening call that the legitimate grievances of homeowner rights advocates over the years are valid! And the only reply from the national pro-HOA trade lobbying group, CAI was a faint, “But, it’s not officially recognized.” Not even a word that something has to be done to make its claims of happiness and harmony a reality. Not a word!

As I wrote about not moving to Arizona, “You are on your own!”

What the HOA laws say and don’t say, and unjust narrow readings

 

The unjust HOA statutes on the books in almost all states were written with the help and guidance of the national pro-HOA lobbying organization known as Community Associations Institute – CAI. Many of these laws, in addition to a narrow reading for questionable Rule 11(a) litigation,  use phraseology leading the reader to believe that HOAs are fair, just and democratic governments. But, when the uniformed read and apply them, like in the case of many HOA managers and boards, they adopt an unjust strict and narrow, “black and white” reading of the words.   

A few examples, as commonly found in both the CC&Rs and statutes, are: 1) with respect to violations alleged by the HOA before it may fine a member, “after an opportunity to be heard”; and 2) with respect to homeowner access to HOA corporation records, “privileged communication” or “attorney – client privilege,” and “contemplated” or “pending” litigation. The attorneys well know the legal concepts behind these terms and how they are unjustly used by the unknowing to the detriment of the homeowner.

First, with respect to HOA violation hearings, a narrow reading of the law simply says that the HOA hold a meeting to allow the member to speak before it finds him guilty of violations. It does not have to meet the legal doctrine of due process protections of a hearing by an independent tribunal where the accused can confront the evidence and witnesses, and may bring witnesses and present his evidence. The law neither requires any adherence to minimal hearing procedures for a fair trial, such as mediation rules, or the rules as set forth in the state’s APA laws regarding hearings before administrative law judges (ALJ). The law and the CC&Rs don’t require them to! But the HOA defenders offer these covenants as just procedures.

 Second, “attorney – client” privilege or “privileged” communications is another “half-truth” misapplied by the unknowing to prevent access to legitimate corporate records, such as detailed financials; contracts, including management firm and attorney contracts; monies paid to the HOA attorney in pursuit of litigation, etc. Privilege is raised not by the attorney, or at the attorney’s insistence, but by the board.

The meaning of “privileged attorney communications” is well established legal doctrine pertaining to attorney work product – the notes, communications pertaining to strategy and tactics in regard to litigation. It is well established that attorney-client privilege does not apply to corporate records.  But the uninformed use it to refuse the homeowner’s legal request, which leaves the homeowner to indeed consider litigation to obtain what is legally valid.

And when is “pending litigation” a fact? Wouldn’t one think that it would require that the HOA was informed by a reliable person, like an attoreny, that if so-and-so doesn’t occur he will sue? Or, is it simply that the board raises this in any context where it refuses to provide the business documents by saying, “I think the homeowner is going to sue”, or “Let’s sue him”?  That is pure and simple “abuse of process.”

Why would a board refuse to proved HOA business records? Wouldn’t that be an indication that they have something to hide? Isn’t that a violation of the board’s duty to the HOA nonprofit corporation to act 1) in good faith , 2) as a prudent person would in similar circumstances (as if it had to spend its own money), and 3) for the benefit of the HOA? And not to protect their activities.

 Apparently the board is unaware, or hasn’t been properly informed by its attorney, that “A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance [on competent legal advice] unwarranted.” Like, maybe, the allegations of a violation are false and contrived, or the “facts” are not true, or that “Mr. X is lying. (The quote is taken from an Arizona statute, but the point is that his good faith reliance cannot be claimed as a defense when the director had other knowledge.)

One would think that the HOA attorneys, especially those “illustrious” members of CAI’s College of Community Associations Lawyers, would know all this. And that these CAI lawyer – lobbyists would be at the forefront of HOA reform legislation to correct these injustices. Doesn’t CAI promote the message (see its web site) that they are “Building Better Communities” and “dedicated to fostering vibrant, competent, harmonious community associations.” Yet, they work against these simple reforms. How can CAI make such statements and not work to create a just and legitimate form of community government?