Tag: CAI

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.

HOAs: Unrecognized, De Facto Private Governments

In the beginning, that’s 1964, the FHA went along with real estate interests and funded The Homes Association Handbook, which, as I have written in Part I of The Foundations of Homeowners Associations and the New America, was the bible for the mass merchandising for “the emergence and acceptance of a quiet innovation in housing” (taken from a historical recounting, Community Associations, the printing of which was funded by both CAI and ULI).

The Handbook had something for everyone who would be involved in making this incarnation work as a widely accepted mode of housing: the builder, the local municipality, the mortgage companies, and even the consumer/homebuyer, to whom it promoted “carefree living,” “affordable housing,” and “maintaining property values,” among other benefits. No negatives were given.and no mention, in this 433-page Handbook, of creating a governing body in accordance with public government statutes (see your state’s municipality laws on incorporated towns or even on home rule). No mention either, of the requirement to be a public entity and therefore to be subject to the Constitution, nor that the Fourteenth Amendment applied to the HOA. The only hint at providing for a democratic form of government came from the promoter’s concern for the legal justification for the HOA to have authority over the private property interests of the homeowners and to impose compulsory assessments: allowing the owners to vote.

Read more on BlogCritics:  HOAs: Unrecognized De Facto Local Political Governments 

CAI Calif. fears threat of artifical lawns to conserve water

In its June 8, 2010 email, CAI-CLAC (California legislative action committee), cries in desperation to stop government intrusion on the right, as they see it, for the HOA to restrict artificial lawns.  A mass rally is called for to stop this serious legal affront to HOA dominance of its members.

State Legislation Removes HOA Authority and Discretion

 Urgent request for “GRASS ROOTS” letters by this Friday

 Assembly Bill 1793 would prohibit associations from restricting or banning the installation of artificial lawns.  . . . The bill totally removes an association’s right to maintain a natural grass streetscape in order to preserve the ambiance and property value.  It will create friction in the association and opens the door to lawsuits.

 Among the reasons for CAI’s opposition to the bill, provided predominantly before its list of “other reasons” is,

 We need to stop the rush to judgment by some legislators who think they are simply saving water by voting for this bill, when in fact the bill creates serious problems and will cause unintended negative consequences. 

 (Please note CAI’s SOP (standard operating procedure) to resort to scare tactics, “the sky will fall”, some dreadful, unsubstantiated consequence will befall the HOA.)

 It’s a water conservation issue to promote the general welfare, including for the benefit of HOA owners who, don’t forget, are still part of the general community.  But, CAI doesn’t see it that way.  CAI does not see HOAs as part of the general community, and therefore, sees no obligations to the to the town, the city or the state to be a good corporate citizen.  The sentiment of the CAI cry in this email is nothing more than:  How dare the Calif. Legislature tell HOAs what to do without our approval?   

 In this email, while CAI proclaims to fight for the noble cause of local, direct democracy,  “the voice of the people”, CAI has actively promoted and encouraged state legislatures to adopt some version of a top-down, parallel set of laws just for private, de facto HOA governments, such as Davis-Stirling, or UCIOA.  The April 2006 media release by CAI HQ said,

 It is the policy of CAI to recommend that when state governments amend their basic community association development laws they consider the need for updated and comprehensive legislation to regulate the development of community association housing consistent with the above goals. Moreover, in undertaking such review, state governments are urged to consider and give favorable treatment to one or more of the Uniform Community Association Acts.

 Furthermore, in this email, CAI advertises, “Serving 3,000,000 California Households in Condominiums and Homeowner Associations.”  This is outrageous and misleading statement! It may serve them as vendors, but not as representatives of these households before public entities.   Even the HOA board of directors does not represent the owners before public entities.  The California Legislature represents all the people of California, including those living in HOAs.  CAI cannot say that it represents HOAs/condos per se, either, since it is not permitted to have these categories as members. 

 The CAI dogmatic ideology is that HOAs are sacrosanct and untouchable, unless approved by CAI, as documented by the  positions taken by CAI lobbyists before numerous state legislatures over the years.   CAI seeks power over HOAs! 

 The California legislators should bear in mind that these canned letters will be coming from the CAI stalwarts and HOA true believers, which will not be a valid representation of the people in HOAs.

  

A digression — checking what the numbers mean

Now, pay attention carefully.  Using this figure of 3,000,000 households (units in Census terms), and CAI and Census data of 2.6 persons per household, gives rise to a calculated  7.8 million people in HOAs/condos.  Also, corroborating, my research[i] on the national ration of HOA population to total US population of 19.6% , yields about 7.2 million people in HOAs — close enough for our investigation.  Consequently, based on the 3 million household figure,  CAI is claiming that it serves almost all of the HOAs/condos in California. 

 Continuing, taking my research figure of the average number of residents in an HOA, nationally, of 211, then there should be 36,997 HOAs/condos (low end).  Cross checking, using the research average of 82 units per HOA, there would be some 36,600 HOAs in California — not bad results.

 Yet, nationally, CAI with its 30,000 proclaimed members, and assuming that each member lives in a separate HOA/condo, would have a membership that contains, at most, about 10% of their stated 305,000 HOAs/condos in this country.   Applying the 10%  membership ratio, then CAI has a member, at most, in some 3,650  HOAs.  (Applying the 211 figure to 3,800 HOAs yields about 770,150 people in HOAs that have a CAI member).

 Notes

[i] cf. Have HOAs hit a growth plateau?, May 22, 2010.