Tag: constitution

Restructuring the HOA model

This Commentary is a position paper on the need to restructure the HOA model of government.  It is not light reading and requires serious consideration and understanding  of the underlying issues.

Background

I have stepped outside the box to offer the boards of directors (BOD) a fresh view of the nature and legalities of the HOA legal scheme. StarMan Group HOA Management Consulting believes that the HOA legal model of government must be restructured to

establish the climate and culture of the HOA enabling the restoration of the lost constitutional principles of democratic government — individual rights, justice and fair play — for its members within the confines of a private contractual government,

In my activist 20 years of HOA reforms, irrational fears have been inculcated in the general public and are the primary elements for the failure to resolve 54 years of endemic HOA issues: fear of loss of home, fear of financial and emotional stress, fear of legal actions and lawsuits, fear of social isolation, and fear of property devaluation. These have been advanced by pro-HOA forces.

The current embodiment of a utopian society (HOAs) was formulated in 1964 (The Home Association Handbook) and CAI was created in 1973 to address the growing dissatisfaction with HOAs. In 1993 it dropped being a tax-exempt educational nonprofit to become a business trade group in order to more effectively lobby state legislatures to protect the status quo of the HOA model of governance.

The HOA model of local government is a fourth type of local government in addition to the public domains of commission, council-manager and council-mayor forms. I ask: Is there a legitimate, bona fide reason and justification for the HOA to function outside public government?   No, there is none!

BOD Reorientation to review the HOA mission

The restructuring of HOAs starts with the education and reorientation of the BOD to better achieve its primary, broad purpose which is to provide quality services to its members. The only statements or covenants relating to the intent or purpose of the HOA focus on the interests of and benefits to the members, and neither to investments nor to social welfare services. The BOD must face the question as to how the best interests of the members can be accomplished by a rejection of the US and state constitutions.

“Maintaining property values” cannot be taken as an investment in your home. The CAI model focuses on punishment and enforcement of violators of the governing documents or those who fail to timely pay their assessments. The governing documents (CC&RS and bylaws) contain restrictions and limitations and any rights or privileges that the members possess under the CC&Rs are laughable when compared to the Bill of Rights or state Declaration of Rights.

I firmly believe that the BOD must undertake a serious, in-depth review of the original intent of HOAs and where it is today and where it’s going. For example, surely an HOA is not a social welfare organization but a private membership nonprofit regardless of any misguided ruling by the IRS. This review must be conducted in an open and unbiased manner free from the years of CAI indoctrination by the CAI School of HOA Governance (my appellation), to which far too many BODs have long been a willing and obedient adherent. Being under the spell of the CAI doctrine, the BOD has lost its freedom of mind, has neglected principles of local government, and functions outside constitutional application.

BODs, in general, resort to CAI not for legal advice on how to run the HOA government but as a crutch to allow them to dodge their obligations to govern the people — their residents — living in the territorial subdivision of the planned community or condo. Why would CAI speak of or admit to the Bill of Rights or to state Declaration of Rights and lose control of the industry? Why haven’t they?

In addressing the management of nonprofit organizations, eminent management consultant Peter F. Drucker wrote: “The first job of the leader is to think through and define the mission of the institution.”  He makes the point that the worthiness of a mission statement lies not in its beauty but in leading to “right action.” It has to be operational, otherwise it’s just good intentions. “One of the most common mistakes is to make the statement [a series] of good intentions.”

CC&Rs are a devise to circumvent the Constitution

The recourse to the real estate laws of equitable servitudes giving legitimacy to the declaration of covenants, conditions and restriction has gone afoul with respect to HOA governments. “The policy makers have failed to understand that the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.” The governing documents reflect the undue influence of the CAI School of HOA Governance, and the failure to accept the reality that the HOA is a de facto form of local government that functions outside the US Constitution.

The Homes Association Handbook model set the tone, the character, and the culture of the HOA “community” from which the boilerplate declarations flowed with the help of CAI lawyers. There are no public disclosures of the loss of individual property rights, or the legislative immunity granted to BODs, or the unjust elections procedures, or the absence of constitutional due process protections, or court rulings of implied waivers and surrenders of individual rights, just to mention a few.

It goes without saying that private HOA governments must be restructured to return to the Union and restore member rights, freedom, privileges and immunities. It can be done and must be done. Plessy v. Ferguson (163 US 537 (1896)) was overturned by the US Supreme Court fifty-eight years later in 1954 by Brown v. Bd of Educ. (347 U.S. 483 (1954)). So can years of unjust HOA Acts and statutes be overturned in the light of today’s knowledge and conditions.

And so, it starts with the review and restructuring of the purpose and intents of the HOA to establish a climate and culture of the HOA conforming to the principles of democratic government as required of all local government by the Constitution.

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Further reading:

 

Toward a democratic HOA subject to the Constitution

The news is good lately as several state legislatures have and are dealing with substantive HOA reform legislation that confronts the HOA legal structure as un-American. California’s SB 323 passed into law last year amid the hostility of CAI; Florida’s HB 623 is in the legislative process of becoming law; and Arizona’s SB 1412 is just starting out in the legislature.

The substantive amendments to state laws are:

SB 323 (CA) — seeks to introduce fair elections procedures for HOAs, addressing one of my 6 substantive defects in the HOA legal scheme.  Deborah Goonan’s excellent discussion of this bill[1] brought to my attention a second defect in the HOA legal scheme, the lack of enforcement of the law.

“A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association. . . . “A member who prevails in a civil action to enforce the member’s rights . . . the court may impose a civil penalty of up to five hundred dollars ($500) for each violation.”

HB 623 (FL) —

“This provision will amend 718 F.S. so any bylaws, or reasonable rules or regulations of the association which diminish or infringe upon any right protected under the Fourteenth Amendment[2] to the United States Constitution or Art. 384 II of the State Constitution and would be void and unenforceable without further action of the association. However, the provision states that the association may record a notice in the public records of the county in which the condominium is located evidencing its intention to not enforce such provision, it would foolhardy for them to do so. This has been overdue in our quest for achieving equal rights.”[3]

Much to my surprise Eric Glazer, of FL HOA & Condo Blog and host of HOA Condo Craze, warns of danger if HB 623 is made law.[4]

To simplify, the 14th Amendment made The Bill of Rights (The first ten amendments to the Constitution) applicable to the states.  So, this law basically says no provision of your governing documents can infringe upon the rights you have under the Bill of Rights.  All of you know several of these rights such as the right to free speech, freedom of assembly, and freedom of religion.

There is plenty of law out there that says when you move into an association, you may give up some of the rights you may ordinarily have in your private home. You do this by agreeing to be bound by the governing documents.

SB 1412 (AZ) — seeks to prohibit HOAs and condos from restricting political free speech. Members are permitted to associate, meet, discuss, show signs regarding political activity.

“NOTWITHSTANDING ANY PROVISION IN THE CONDOMINIUM DOCUMENTS, AN ASSOCIATION MAY NOT PROHIBIT OR UNREASONABLY RESTRICT A UNIT OWNER’S ABILITY TO PEACEFULLY ASSEMBLE AND USE PRIVATE OR COMMON ELEMENTS OF THE CONDOMINIUM IF DONE IN COMPLIANCE WITH REASONABLE RESTRICTIONS FOR THE USE OF THAT PROPERTY ADOPTED BY THE BOARD OF DIRECTORS. AN INDIVIDUAL MEMBER OR GROUP OF MEMBERS MAY ORGANIZE TO DISCUSS OR ADDRESS PLANNED COMMUNITY BUSINESS, INCLUDING BOARD ELECTIONS OR RECALLS, POTENTIAL OR ACTUAL BALLOT ISSUES . . . .”

I cannot emphasize that these bills have a very large umbrella covering many issues found at fault in HOAs. They provide the legal authority supporting many, many complaints, even those where the homeowner is just not happy with the way the HOA is run. In these cases, the HOA hasn’t really violated any law of the governing documents per se. The complaints should their focus on the lack of fair elections to remove wayward boards, or due process and equal protection of the law violations. The 14th Amendment applies!

What is needed is the strong support for the champions of these bills, Sen. Bob Wieckowski in CA, Senator D. Farnsworth in Arizona, and Representative Jason Shoaf in Florida. The California bill made law was achieved, in my opinion, with the help of the strong support of Marjorie Murray of CCHAL.[5] They fought and are fighting the system — state legislatures do not favor HOA reforms.

References

[1] “California HOA elections bill update (March 2019)”, Deborah Goonan, Independent American Communities.

[2] The 14th Amendment. Section 1 state prohibitions against laws denying due process of law and the equal protection of the laws, and abridging the privileges and immunities of citizens.

[3] Comment number 6, CCFJ.net, Milena Macias, Esq. (Feb. 4, 2020).

[4] “A PROPOSED AMENDMENT TO THE LAW THAT HAS DANGER WRITTEN ALL OVER IT”, Florida HOA & Condo Blog, Eric Glazer, Esq. (Feb. 3, 2020)

[5] Center for California Homeowner Association Law.

 

 

 

 

HOAs are in need of a major restructuring

Whether you like your HOA, or dislike your HOA, is immaterial. It’s all about the Constitution and the HOA legal scheme. What matters is whether the HOA legal structure is a danger to the country, because it will happen again. And none of us can have confidence, based on the historical record, that it will not happen again because . . . every day it is allowed to continue at will.[1]

It is well past the time for a restructuring of the HOA model of local government formulated some 56 years ago by ULI in 1964 — The Homes Association Handbook. In 1973 CAI was formed to deal with the persistent problems facing the HOA model, and in 1992 CAI was forced to change its educational tax-exempt status to that of a business trade group in an attempt to deal with the continued problems with HOA.[2] In 2005 it had to drop HOAs as a member due to conflicts with the purpose of a business trade group — HOAs are consumers of CAI services.

These HOA problems and issues are endemic to the legal model of unconstitutional, private governments as a result of the intents and motivations behind the introduction of HOAs: to make $$$ by means of a mass merchandising effort.[3] Constitutional considerations were ignored and avoided by focusing on the legalities of real estate law and equitable servitudes to justify the legal authority over the HOA members. The policy makers have failed to understand that the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.

There is no denying that the HOA subdivision managed by competent boards and professionals appeals to the desires and wants of home buyers and bring many benefits. It comes as no surprise that the vast majority of persons living in an HOA approve and love their HOA, finding only minor problems with the board of directors or HOA managers. The annual “satisfaction” surveys produced by the pro-HOA trade group, CAI, reflect this positive attitude.

However, the HOA legal structure and scheme is authoritarian in nature: strong central power, limited political freedoms, no accountability, and under the rule of man, not law.

But the HOA is truly a totalitarian democracy. A totalitarian democratic state is said to maximize its control over the lives of its citizens by using the dual rationale of general will (i.e., “public good”) and majority rule.[4]

Prof. McKenzie wrote in 1994: “HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.”[5] The authoritarian nature of HOA-Land is masked by a thorough indoctrination that presents a false picture of the real estate subdivision as democratic, inappropriately named a community, simply because the members are allowed to vote, as meaningless as it is.

The HOA danger to the Constitution has been presented in several Commentaries herein, and in the white paper found in the book, The HOA-Land Nation Within America.[6]

There is no denying that the HOA subdivision managed by competent boards and professionals appeals to the desires and wants of home buyers and bring many benefits. However, as this whitepaper addresses, the means to this end are highly suspect and harmful to our democratic system of government.

StarMan Group, HOA Management Consulting, offers a program to resolve many of the substantive defects with HOAs by means of the complete restructuring of the model: a program of organizational development. It also requires the removal of the adverse influences by the CAI School of HOA Governance as I collectively refer to CAI’s policies, best practices, guides, communications, seminars and certifications, and in its Manifesto.[7]

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References

[1] Rep. Schiff’s (Rep. Adam Schiff is the leading Democratic impeachment prosecutor), opening argument Friday, Jan. 24, 2020, appealing to the Senators to uphold the Constitution. “Whether you like the president, or dislike the president, is immaterial. It’s all about the Constitution and his misconduct. What matters is whether he is a danger to the country, because he will do it again. And none of us can have confidence, based on his record, that he will not do it again because he is telling us every day that he will.”

[2] See in general: Evan McKenzie, Privatopia: Homeowners Associations and the Rise of Residential Private Governments, Yale Univ. Press, 1994; Donald R. Stabile, Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing (funded by CAI and ULI).

[3] See in general, “Analysis of The Homes Association Handbook,” George K. Staropoli (2006).

[4] George K. Staropoli, The HOA-Land Nation Within America, p. 22 (StarMan Press 2019).

5 Supra n. 2, Privatopia.

[6] Supra, n.4, p. 4.

[7] Community Next: 2020 and Beyond (May 5, 2016).  A manifesto is a public declaration of intentions, opinions, objectives, or motives, as one issued by a government, sovereign, or organization. A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing body’s philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.

 

Associa proclaims management firms as HOA partners

In its June 25, 2019 blog, “What is an HOA?, Associa proclaimed that “The HOA board works together with community partners, like a Community Association Manager (CAM), to ensure the responsibilities of the association are carried out.”  And did you know that, according to Associa, “HOAs operate a lot like a local government, small business, and community collective rolled into one.”    It is the only reference to municipal government in the 4-page “What is an HOA? article, without mention of any constitutionality issues.

This is the sui generis view of private government principalities supported by your state legislature.  “Sui generis” means “unique, one of a kind” and is used to justify special laws for a special organization, the HOA. Existing constitutional law is inadequate to support this model of local governance and so, in violation of US and state constitutions,  we see all those HOA/PUD/condo “Acts” in almost every state.  These Acts constitute a parallel supreme law of the land with sharp contrasts to the US Constitution.

And so Associa has elevated HOA management firms from parties —  stakeholders – with an interest in your private home to the status of equal interests in your home. 

Associa is a nationwide management firm conglomerate with affiliations in almost every state.  It is run and owned by former Texas Senator  John J. Carona and his wife Helen, I presume.  It is a devotee and follower of the CAI School of HOA Governance.  Associa provides instructors for CAI’s certification and educational programs, being awarded “outstanding Educator of the year. ” From its web page:

 Industry Involvement

Associa leads the march into the future for community association management through participation in industry trade organizations and professional certifications.

·  *AAMC – Accredited Association Management Company

·  AMS – Association Management Specialist

·  CMCA – Certified Manager of Community Associations

·  CPM – Certified Property Manager

·  LSM – Large-Scale Manager

·  PCAM – Professional Community Association Manager

Additionally, Associa personnel include nationally published authors who have been selected to help write the courses that teach other industry managers through CAI’s Professional Management Development Program. Associa personnel have also served on CAI’s national teaching staff and have been awarded national distinctions such as “Outstanding Educator of the Year” and “Excellence in Education.”

 

Sun Cities rec centers: politics at the AZ legislature

I have cautioned homeowner rights advocates to be respectful of their legislators as they are the only game in town to bring about HOA reforms.  But there come times to hold the legislators accountable for their abuse of discretion and power amounting to violations of the US and Arizona Constitutions, and failure to “establish justice, insure domestic tranquility . . . promote the general welfare and secure the blessings of liberty.”  (Preamble to the US Constitution).

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Background

Many hours were spent in researching the facts surrounding this bill to determine the real intent behind its sponsorship and the true motivations for its support.

The AZ House GOV committee just passed this reincarnation of the failed HB 2374 by a 6-5 vote (Reps. Kavanagh, Payne, Blackman, Petersen, Rivero and Thorpe all voting in favor of the bill) with the assistance of Senator Borrelli who allowed SB 1094 to be used for a S/E replacement of HB 2374. Their reasons are completely untenable giving 1) the nature of the bill, the misleading assertions, convoluted language including double negatives, 2) unbelievable legislative intent “to clarify” a 1994 bill some 24 years later, and 3) the constitutionality of the proposed statute.

Before proceeding, it must be understood that in 2015 the Superior Court in Anderson v. SCRC held the Sun City rec center, SCRC, to be an HOA.[1]  Now, 4 years later, this bill is an attempt to overturn this ruling.

In reading the bill several statements caught my attention.  I will explore them one at a time.

First, there is the question of the purpose of “before January 1, 1974.”  I cannot find any justification for this date, as prior dates are used to get around grandfathering problems to avoid litigation.  Here the bill seeks application to ‘associations” prior to this date, under the same conditions found in today’s bill.  However, Sun City was incorporated in May 1968 and SCW in Sept. 1979.  Where does 1974 come from?

1.  Nature of the bill et seq.

SB 1094 is an attempt to avoid my position that the original Sun City bill, HB 2374,  violated the AZ Constitution being a special law for a particular entity, the 2 Sun Cities.  The heart of the bill has now become permitting the “voice of the people” to be heard to reject or uphold the PUD statutes in question.  In what I referred to as cute, slight-of-hand manipulation to confuse the public, the bill permits a vote of the HOA members to decide whether or not their rec center should be an HOA or not. Say what??

The bill is cleverly worded with convoluted statements containing double negatives[2] or wording amounting to a double negative.  “This chapter [regulating HOAs] does not apply [to] a nonprofit corporation . . . that does not have authority.  And then adds an illogical approval by the membership to not accept –to reject —  the law. It seems designed to cause confusion. Read Subsections C and D carefully.

Further confusing is the redefinition of “Association” to include associations not operating as a de facto HOA to elect to become an HOA and be regulated. Say what?

Each of the 3 sections discussed is a statement that the rec centers, now “harmlessly” disguised as “associations,” are exempt from the PUD Act and regulation by the state, unless an illogical vote by the membership approves obedience to the law  — we want to be an HOA — as ruled by the court in Anderson.[3]   (This aspect of the bill is covered in more detail in (3) below).

  1. Outrageous claim of legislative intent

The PUD enabling act of 1994 is a short 2-page, 6 sections Act, of which I have a copy and have read.[4]  It does not contain any statement of legislative intent.  Its version of 33-1802, Definitions, remains essentially intact, for our purpose here, after 24 years.  SB 1094 claims to uncover an error, an oversight into the legislative intent and seeks to clarify it and set it straight. This defense is without merit, plain and simple!

The bill in its new form remains an unconscionable support of a special law for a special, miniscule application for just 2 HOAs: Sun City and Sun City West.  Furthermore, by issuing this “legislative intent” the Sponsor claims that it speaks for all the Arizona legislators aside from the 6 House GOV committee Representatives who supported SB 1094

  1. Unconstitutional delegation of legislative power

SB 1094 does not escape the constitutionality challenge  that it is an invalid delegation of legislative authority to private persons, flying in the face of long held doctrine declaring such acts as unconstitutional. This unconstitutional delegation was dealt with in McLoughlin v. Pima County  (CA-CV 2001-0198, Div. 2,  2001) concerning zoning restrictions determined by the people. In its discussion the Court quoted from several cases, and for brevity,  

“However, it is a well-established theory that a legislature may not delegate it’s authority to private persons over whom the legislature has no supervision or control.” 

The bill declares that a rec center (after redefining what an HOA is) is not subject to HOA regulation unless a majority of the owners want it to be as described in (1) above.  The people, the homeowners, are making law! That’s a mockery of the law! It is an unconscionable bill that turns the Constitution on its head and grants more freedom to the independent HOA principalities.

It is a very astute political ploy and a surprising acknowledgement of the political and social dynamics at work within HOAs.[5]  The legislative mantra, here and in other states, is that the homeowner is free to vote on amendments under the governing documents.  The wording of this bill shows that the legislators know better and understand that overthrowing the HOA board is a very high barrier to overcome.

The underlying misleading picture ignores the fact there is general apathy and indifference to homeowner participation, just like with the voter outcome in our general public elections.  In short, the likelihood of an approval of an amendment is very small, especially when there would be no lobbying by the HOA board to support the vote. Why didn’t the sponsor construct the bill to seek a positive response by the membership for approval, rather than allowing the law to be changed by the highly likelihood occurrence of a default vote —  people not voting.   It’s a rigged bill to overturn the Anderson ruling by the court.

Good ol’ fashioned politics at work “here in River City.”

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The information contained in this written or electronic communication, and our associated web sites and blog, is provided as a service to the Internet community and does not constitute legal advice or opinion. We perform legal research and case analysis services, but we make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in any report, finding, recommendation or any communication, or linked to this web site and its associated sites.  No document prepared by HALRIS or George K. Staropoli is to be considered a legal document to be filed in a court or in a legal proceeding. Nothing provided by HALRIS or George K. Staropoli should be used as a substitute for the advice of competent counsel.  George K. Staropoli and no person associated with HALRIS, AHLIS, HOA Constitutional Government or Citizens for Constitutional Local Government are attorneys nor are employed by an attorney.

Notes

[1] Anderson v. Recreation Centers of Sun City,  1CV 2015-012458, Maricopa County (2018).
[2]   “Double negatives are two negative words used in the same sentence. Using two negatives turns the thought or sentence into a positive one. Double negatives are not encouraged in English because they are poor grammar and they can be confusing.” Your Dictionary.com. 
[3] Supra n. 1.
[4] See Enabling Act.
[5] See The HOA-Land culture (2019).  “We must make the injustice visible”  Mahatma Gandhi.