Tag: CAI

HOA statutes create state actors and actions

[The message of this letter to the Arizona Legislators is valid in regard to the legislation and statutes of many other states. The corporate form of HOA governance needs and relies on its unjust power to deny homeowners their constitutional rights in order to coerce obedience. The special interests, especially CAI, prefer that these valid arguments not be exposed to the public, legislators or the media. This is just what we must do if we are to obtain fair and equitable treatment under the laws].

April 30, 2005

Dear Arizona Senators:

Please do not pass this Homeowner Association bill, HB2154. It will further entangle Homeowner Associations as state actors.

The amendments to ARS 33-1260 & 33-1806 read, in part,

(h) A statement that provides “I hereby acknowledge that the declaration, bylaws and rules of the association constitute a contract between the association and me (the purchaser).

I believe this would be challenged in court as violating other statutes on contract law that require a meeting of the minds and a signature by the homeowner. There is no explicit waiver of constitutional rights. The above wording is suitable for a government agency or some municipal government entity, but not for a private contractual arrangements.

For example, creating or modifying HOA Rules do not require the homeowner’s signature, or even a vote of the members. Adding this paragraph further strengthens the close nexus between the state and the HOA, and further solidifies the status of the HOA as a state actor(1).

The Arizona Constitution, Article II, Section 2, reads (my emphasis):

“All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights.”

The provisions of HB2154, and ARS 33-1256 and 1260; 33-1803, 1806 and 1807; 42-13402 (common area valuation), collectively support the validity of arguments that HOAs are state actors and, thus, subject to the 14th Amendment protections of due process and the equal protections of the laws. Realizing that these statutes will soon be challenged, passing this bill should be carefully reexamined.

A short presentation of supporting constitutional arguments can be found below under Note 2.

Respectfully,

George K. Staropoli
Citizens For Constitutional Local Government

NOTES
1. This appears that this is the only bill out of 22 HOA bills that will be sent to the Governor, Other aspects that interfere with the homeowners rights inlcude: removal of disclosure of loss of homestead exemption (don’t tell the buyer); adds reasonable collection fees to HOA liens (actually, more fees to attorneys since attorney fees are already included); revises board removal procedures; replaces proxy voting with secret ballots without any protections relating to the counting and verification process, and any meeting “new business” leaves homeowner out on the cold.

2. Constitutional arguments, supported by case law, from Nowak & Rotunda, Constitutional Law §§ 12.3, 12.4, (6th Ed., West Group 2000) (my emphasis).

· Cases in which alleged wrongful activity . . . have a connection to state legislation present the widest scope of factual situations.
· When state legislation commands a certain activity, or officially recognizes its legitimacy, there is no question but that state action present whenever someone follows the guidelines of the statute [as demonstrated by the above mentioned statutes].
· Again the reason . . . is that the alleged wrongdoing appears to be connected to activities of the state in such a way that it can be said to be a denial of rights by the state itself.
· When judges command private persons to take specific actions which would violate the Constitution if done by the State, state action will be present in the resulting harm to constitutionally recognized rights [property and liberty rights].

The HOA Principality

A few years ago I made the comparison that HOAs were a modern version of the independent city-states of ancient Greece and medieval times. I was wrong. I was wrong because these city-states had no higher-level government, no king or emperor, to whom they were answerable. That’s why they were independent city-states.

The more accurate comparison would be to principalities that exist in small numbers today in Europe; such as, the Principality of Monaco. They exist within the boundaries of a larger political body, the country or nation, and are essentially self-governing with their own laws. They are governed by an almost absolute ruler, the Prince. They are protected, a “protectorate” you might say, by their surrounding nations and exist by this “higher” government choosing to honor the principality in accordance with its laws.

Today, in the United States of America, the federal and state political bodies have issued “charters” to private individuals, granting them the status equivalent to a principality, much as the kings and emperors of the 16th – 18th centuries handed out charters to loyal followers. These modern charters are known as homeowners associations and are issued without requiring a republican form of government or subjecting all of its citizen-members to the privileges and immunities that apply to all citizens of the US.

If you follow the arguments of the longtime promoter of HOAs, the Community Associations Institute, CAI, you will find that its justification for this state of affairs and private government does not address the US or state constitutions, but the lesser laws of the land, the real estate common laws of servitudes. These opposing views is quite apparent when you follow the arguments by the Frank Askin of the Rutgers Constitutional Law Clinic and CAI in the Twin Rivers New Jersey case on HOA constitutionality questions.

I am not arguing against the right for communities to set their own special ordinances and special taxes for community amenities, but for the guarantees of life, liberty and the pursuit of happiness to all people. If we are to remain true to that contract between the federal and state governments, embodied in their respective constitutions, then the era of the HOA principality must come to a swift and decisive end.

See CAI’s Amicus Brief