CAI – Page 45 – HOA Constitutional Government

The Lament of the CAI against a pro-homeowner bill

Hear the lament of the California CAI LAC about a pro-homeowner bill.

AB 2502 would give financial incentives for owners to unfairly manipulate their legal obligation to pay HOA assessments by refusing to pay for approximately one and a half years or up to $3,600 until the association can take appropriate legal action for that owner to pay. This will cause financial havoc for HOA’s. Owners should never be given a right to intentionally stall the payment of debt.
Owners should not be given the right to unilaterally change the payment plan that was lawfully entered into by and between the owner and HOA. There would be no reason to enter into a plan if an owner could change it at will.
HOA’s must be able to retain counsel or other professionals to assist them in payment plans. The bill permits HOA’s to retain experts IF the owner grants permission to do so. HOA’s, just like owner’s must always be given an ability to retain professional assistance.
Creditors, like HOA’s, need to use collection agents periodically. Those agents, like other businesses, require payment. This bill makes it extremely difficult to pay those agents and as a consequence, HOA’s will rarely use them.

This is a desperate attempt to turn homeowners against their own best interests, and to support the oppressive, authoritarian HOA de facto government! Hey CAI guys, what about adhesion contracts; “no need to see” constructive notice to bind one to a contract and to surrender one’s rights, freedoms, privileges and immunities; kangaroo court due process procedures; the right to subsequently alter the contract at purchase time without the buyer’s consent; unfair election procedures; and no enforcement against violation by the HOA government? What about these gross injustices?

To claim that homebuyers openly and fervently embraced this treatment by the HOA is an insult to the good people of California. It is grossly disrespectful and demeaning.

This Grassroots Alert email alert ends with the true objective of CAI:

Thank you for helping us preserve association solvency!!! [and our income stream]

The legitimacy of HOA boards and state legislatures

Is your legislature, the “sovereign” of the state, a legitimate government? This is a question that the people, and your government, have avoided asking and answering, but it must be addressed today. State legislatures have been acting, and the people have unknowingly accepted, the legislature as the “people” rather than as the representatives of the people. Constitutional scholar Randy Barnett argues, in reference to Congress, but applicable to all states and state legislatures,

Many people no longer conceive of Congress as the servant of — and checked by — the people. Instead they picture Congress as We the People itself. Under the prevailing theory of “popular sovereignty”, the legislature is thought of as the people personified, entitled to exercise all the powers of a sovereign people.

Because “the People” can “consent” to alienate any particular liberty or right . . . legislatures . . . can restrict almost any liberty and justify it in the name of “popular consent.”[i]

We, the people, have forgotten and the legislators have ignored, that the basis of our representative system of democracy rests on the consent of the people, not on the divine right of kings, on the right of “We the People” to govern themselves. As Barnett asserts, “They [the Founding Fathers] made this declaration because they believed that the consent of ‘We the People’ was necessary to establish a legitimate government.”[ii] We have witnessed decisions by the California Law Review Commission[iii], the NJ Supreme Court[iv], the Texas Supreme Court[v] and the Arizona Legislature[vi], to name a few instances, completely contrary to a just and faithful representation of the people within their respective states. And it is this failure to represent, in good faith, all the people for their benefit — the general public — and not for the benefit of a “faction” of the people, whose influence is weighted so heavily as a result of the moneyed special interests that gives rise to concerns about the legitimacy of our legislatures.

The legitimacy of our government, as set forth in the Preamble to the Constitution, rests on the consent of the people. But, in a representative system of government the practical answer to 100% consent, or “actual consent” by each and every person, is “majoritarian” rule, or the rule of the majority. Understanding that our legal system, not moral system, holds all non-consenting people to be bound by the proper decision of the majority. In other words, all the people are held to acquiesce and to obey the decisions of the majority, even those to which they did not give their actual consent. The important question that must be asked is: Does this practical solution to the effective functioning of a representative system create a moral obligation in conscience to obey the law? Barnett sheds some further light on this question,

Only if it is legitimate can an existing constitutional system issue commands to the citizenry that bind individuals in conscience. Therefore, though some degree of acquiescence may be necessary to establish a command as positive law, more than acquiescence is needed to create a moral duty to obey such a command.

[Majority] consent legitimates lawmaking only on the assumption that individuals have rights and there are things no person or group can do to them without violating their rights. For a law is just, and therefore binding in conscience, if its restrictions are (1) necessary to protect the rights of others and (2) proper insofar as they do not violate the preexisting rights of the persons on whom they are imposed.

Without actual consent, liberty must be strictly protected. In the absence of actual consent, a legitimate lawmaking process is one that provides adequate assurances that the laws it validates are just in this respect. If a lawmaking process provides these assurances, then it is “legitimate” and the commands it issues are . . . . binding in conscience unless shown to be unjust.[vii]

When we examine bills before our legislature, especially those bills protecting homeowner associations or denying the people their rights, freedoms, and liberties; and their privileges and immunities under their state constitutions, we should be conscious of the legislature’s obligations to the people that they represent. That they are not a government unto themselves that cannot do any wrong! That their legitimacy rests on just laws respecting the rights and privileges of the people without violating the rights of others. That their acquiescence to obey these unjust laws and covenants cannot be misconstrued and interpreted as having consented in good conscience to have agreed with the laws or with the HOA’s governing documents.

The pro-HOA supporters led by the national lobbying group, and self-proclaimed educator for HOAs, CAI, simplify the above to a false and erroneous sound bite that the homeowner “agreed to the governing documents.”

The vast majority of these HOA and condo statutes and “acts” do not measure up to qualify as legitimate laws. The government, realizing that it cannot achieve a voluntary acceptance and willingness by homeowners to obey these laws in conscience, must resort to repressive and punitive laws as found in any other dictatorship or banana republic, even those with a facade that the people have a right to vote. These unjust laws mimic the private government “constitutions”, the governing documents of these planned communities, with their authoritarian HOA governments.

America needs to return to fundamental democratic principles, and to the unmistaken intent, goals and objectives of the Founding Fathers, that does not include “maintaining property values”, as summarized in the Preamble to the Constitution:

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

References

[i] Randy E. Barnett, Restoring the Lost Constitution: The Presumption of Liberty, Ch. 2 (Princeton University Press, 2004).

[ii] Id, Ch. 1.

[iii] George K. Staropoli email letter of April 11, 2006 to Mr. Hebert, Exec. Dir., California Law Review Commission in reference to AB 1921 (major rewrite of the Davis-Stirling Act, absent Chapter 2, Member Bill of Rights (http://pvtgov.org/pvtgov/downloads/AB1921_letter.pdf).

^[iv] Committee for a Better Twin Rivers v. Twin Rivers, 929 A.2d 1060 (NJ 2007) (HOA constitutional free speech case) (http://pvtgov.org/pvtgov/downloads/TR_SC_decision.pdf).

[v] Inwood v. Harris 736 S.W.2d 632 (Tex. 1987) (homestead; covenants running with the land supersede Texas constitution).

[vi] Failure to pass HB 2034 (2009) and HB2153 (2010) asserting public government, not HOA, control over public streets; default superior court decision in February 2009 declaring an Arizona statute providing for the independent tribunal adjudication of HOA disputes by the Office of Administrative Hearings as unconstitutional.(http://pvtgov.org/pvtgov/downloads/OAH-constitutionality.pdf).

[vii] Supra, n. 2

Government of the people, by the people, for the HOA

The following email letter from Mr. Brown to the Arizona legislative leaders reflects his concern about democracy in America. (For more information on this HOA bill, please see public streets: the battleground for private or public government control).

My dear President Burns, Chairman Tibshraeny, Vice-Chairman Harper, Members of the Senate Government Institutions Committee, Senator Bunch, Representative Barto, Co-Sponsors of HB2153 and Representative Barnes:

“From time to time we read in the newspapers, or hear on the radio, about policies and procedures and practices in the Arizona legislature. Most often that which we read or head is critical of how the legislature goes about its business. Words such as “fair” and “open” and “level playing field” are used, as if to imply that the legislature should operate in a significantly different manner that it does.” Senator Randall Gnant, “From Idea…..To Bill…..To Law, The Legislative Process in Arizona,” February 2000

The Guest Opinion, “Who controls public streets,” Arizona Capitol Times, April 1, 2010, is on-point re the proposed HB2153 legislation as well as the global issues respecting associations’ control of property not owned by an association, associations’ control of the conduct and actions of Arizona citizens clearly not subject to the association’s governing documents and associations’ coveted power and dominion over homeowners subject to the association’s governing documents, the sacrosanct “private contract.”

Association stakeholders opposed to HB2153 regularly blur the lines between their long-held belief in “private contracts” not to be interfered with by federal, state, county and/or municipal governments and certainly not the legislature unless and until it suits the stakeholders and their client associations’ interests as evidenced by associations’ growing reliance on “what can government do for” stakeholders and associations today. (See Community Resource, Issue 1 / 2010, “What Your Local Government Can Do For You,” Community Associations Institute / Central Arizona Chapter, attached)

“Getting a hearing on a bill is a crucial first step for individual citizens, lobbyists, special interest groups and state agencies..in the Senate, bills that receive a hearing have a high likelihood of passing the full Senate. So, while failure to secure a hearing is a virtual disaster for a bill, getting a hearing takes a bill on the longest step towards becoming law.” (Gnant)

Please include HB2153 on the Committee On Government Institutions’ agenda, Consideration of Bills, permitting the peoples’ representatives in the Senate to vote on the bill’s passage as your brethren in the House, the people’s other representatives, did so on February 17, 2010 (43/14/03).

Respectfully,

William M. Brown

Sun City HOA: a real independent principality

Sun City, AZ. a renowned retirement community, is an unincorporated town under the governance of the Sun City HOA (SCHOA). It does not qualify as a planned community or as an HOA under the state’s statutes. SCHOA is a private nonprofit corporation — no mayor & no town council, governs it. A sort of a throw back to the times when the sovereign, the king, issued charters or grants of authority to private organizations to conduct business or to govern new lands.

In modern times, does the nonprofit corporation charter by the state, the new “sovereign” of a republic, truly grant a nonprofit corporation the right to function as the legitimate government of a sub-division of the state? This could not possibly the intent of the corporation statutes since the state abounds with municipal corporation statutes — cities, towns, special districts, etc. — and with methods and procedures for incorporating new towns and cities. The appeal of direct democracy, local government control or “home rule” is understood, and agreeing to be governed by a business form of government under corporate laws could be viewed as a strong desire for independence from unwanted influences and intrusions.

Sun City is indeed such an independent government, not answerable under state municipality laws or the Constitution, as it is not subject to the planned communities statutes. Sun City is just subject to the broader corporation statutes that were in no way written to establish a democratic form of political government. This sort of independent principality status has more in common with a tribal society where the inhabitants of the village are loyal first and foremost to their tribe and village, and to the leaders of the tribe, than to their state or country.

This tribalism reveals itself as the Sun City HOA does not require mandatory assessments, yet each deed requires that the owner make mandatory payments to another nonprofit, the Recreational Centers of Sun City (RCSC). And in order for RCSC to qualify for common area real estate tax treatment, all owners “must be obligated to pay mandatory assessments to maintain and manage the common areas.” Consequently, to accomplish this reduced tax basis without having to be subject to state planned community laws, a separate agreement is required to be signed by the owner agreeing to pay, not the HOA, but RSCS dues. This is extraordinary, since the deed itself could simply require mandatory payments to a bona fide HOA that would own and manage the common areas, as is the case with a genuine HOA.

The strong desire to independent of state laws, yet to use them as above, required an amendment to the common area valuation statutes, ARS 42-13402 et seq., adding the “must be” clause above in 2000 (Ariz. Sess. L. Ch 196; HB1251). What could have possibly been the intent of this statute other than to bestow a gift upon Sun City, an unincorporated community, tax benefits amounting to an estimated $113,000 per year, or $1,130,000 over the past 10 years?

Today, the residents of this independent “principality” are coming once again before the legislature, with the SCHOA attorney (a member of the national pro-HOA lobbying group, CAI), to deny the state its legitimate right to regulate and control the public streets within Sun City (HB 2153). Suddenly, parking has become a safety issue in spite of the fact that, from the very beginning, the county planning board approved these alleged unsafe streets, and legal mechanisms are available to SCHOA to obtain variances on a case-by-case basis.

Don’t buy it! Sun City is demanding complete freedom from the state with no interference into the “internal affairs” of their principality. State cooperation, provided it is consistent with the aims and goals of Sun City, however, is acceptable and welcomed.

HOA seeks to curb advocates’ right to internet free speech

One of the most important factors that has helped homeowner rights advocacy has been the lack of control and influence over the Internet by HOA industry special interests. Even Community Associations Institute, CAI, leadership has recognized the impact that the Internet — the websites and email lists — has had on its domination of the information delivered to the policy makers, especially the legislators.

Today, in California, an HOA and its CAI member attorneys are seeking to acquire the Internet domain name, AHRC.COM, not as the result of a free speech or defamation court decision, but ostensibly as payment for a judgment. Many believe that this is a legal technicality to shut down this powerful voice of the homeowners who read and publish information criticizing and exposing events, incidents and people opposed to the protection of homeowner rights. How much is a nonprofit domain name worth? Will the HOA continue the policies of AHRC.COM and publish and distribute information contrary to HOA boards and the industry special interests? The immediate response is, “Hardly”. It can only be seen as an attempt to stifle Internet free speech.

Eight years ago in 2000, when I first became involved, AHRC.COM was the only nationally known homeowner oriented Internet delivery system — publisher and distributor — of material information for decision-making by homebuyers and legislators. The CAI attorneys were rarely identified as members of the national lobbyist trade group, as today, with its personal agenda to support the status quo. Advocates were not even consulted.

In 2000, advocates opened several new email lists and websites. HOANET and CCFJ are two well-known sites that began operating that year. Others followed. The independent Internet began attracting homeowners relieved to find a vehicle to obtain, share and distribute information on HOA conditions and incidents, information lacking from those state consumer protection agencies, such as the state’s attorney general office, the real estate department, business and professional regulatory agencies, and designated consumer protection agencies.

(NYS has the most comprehensive document, but an after the fact document, “What To Do About Problems With Your Homeowners Association”, availabe online from the Attorney general’s consumer protection link. However, it does not address most of the issues raised in “10 Myths About HOAs”).

It took only about a year before the media actively sought out advocates as a result of this new publication source, and the people’s side, the homeowners, began to be heard. With criticism backed by supporting materials, the industry had to answer questions and defend its actions to the public. Many of the most egregious sources of information “headed for the hills”, and we now see the “puppet” groups of management firms and associations of association board members standing in place of most of the CAI member lobbyists. The playing field has been leveled quite a bit, but the industry with its national well-financed organizations still dominates the policy makers. The aims and purposes of the Founding Fathers to explicitly protect free speech, making it the First Amendment, testifies to the place free speech plays in the proper functioning of a democracy. Along with cries for sunshine laws, open meetings and freedom of information access, the internet public information publishing and distribution vehicle for homeowners associations is a 21st century poster child for first amendment protections.

We must not allow the HOA industry special interests to take control of the last, truly independent news service vehicle available to homeowners seeking a redress of grievances before state legislators. AHRC.COM must not be placed in the hands of the opposition where it would languish and disappear, an event harmful to our democratic system of government.

Read what others have to say about this event. Go to http://coloradosprings.yourhub.com/CrippleCreekTellerCounty/Stories/News/Government/Story~442525.aspx