Tag: contract

De facto NJ private HOA governments granted liability immunity

While reading the NJ Superior Court case, Fernicola v. Pheasant Run HOA[i],  I was surprised to find that New Jersey statutes grant an HOA greater immunity than granted to public entities.  In this case, a homeowner was injured as a result of tripping on an uneven section of common ground sidewalk.  One adjacent slab was 2 inches  above the other, of which the HOA was well aware.  But, this was just one such incidence of an  uneven sidewalk.    The HOA was not found guilty of gross negligence.

Negligence is a wrong under a duty of care doctrine, to which  HOAs and public governments are held accountable.  In short, from my lay knowledge of the law, a complaint must show that a duty of care existed, and that the accused violated that duty resulting in damage to another caused by this failure of care.   In general, public entities are granted either absolute or partial immunity from such liability[ii], under the logic that who would work for the government if all employees were made liable for their actions.   Apparently, to even a higher degree of protection,  this logic was applied to  de facto, private, contractual government HOAs.

Following is the appropriate section of the N.J. statutes.  Note that, once again, the law defers to, and makes legal, privately drafted contractual provisions. The presumption is that all members to these CC&R servitude contracts agreed to each and every surrender of rights and protections.  Note, too, the deliberately awkward wording of subsection (b), which obscures the fact that the HOA has immunity except from any of the enumerated factors.  N.J.S.A. 2A:62A-13 provides as follows:

a. Where the bylaws of a qualified common interest community specifically so provide, the association shall not be liable in any civil action brought by or on behalf of a unit owner to respond in damages as a result of bodily injury to the unit owner occurring on the premises of the qualified interest community.

b. Nothing in this act shall be deemed to grant immunity to any association causing bodily injury to the unit owner on the premises of the qualified common interest community by its willful, wanton or grossly negligent act of commission of omission.

Under real property tort law liability[iii], there are three categories of a duty of care toward others by property owners.  We would expect this common law doctrine to apply to HOAs were it not for special laws for private organizations.  Under tort law, there is not duty of care for trespassers — they enter at their own risk.  Licensees are people you invite on to your property, such as social guests.  With this class, the owner must only inform of conditions that he is aware of. The last class, Invitees are those whom the owner invites on to the property to conduct business, or that has public services, such as a public phone, etc.  The owner has a duty to inspect and to  inform this class of people of any situations that might prove harmful, such as faulty construction, etc.  However, given the above special statute, the HOA has almost no accountability to its member-owners; they would get a better deal from belonging to de jure public government.

IT SHOULD BE CLEARLY UNDERSTOOD that these grants of special privileges to private organizations, as the various state HOA and condo laws can be described, occur without any justifications or consideration being offered to the homeowners as to enhanced rights to deal with any abuse of these special grants.

AND LET US NOT FORGET the wisdom of the NJ Supreme Court in Twin Rivers[iv] that homeowners are protected by the business judgment rule, and not to worry about constitutional protections.  The Court failed to note the this rule was also designed to protect the HOA entity and not the people from abuse, in contradiction to the principles found in the Constitution and Bill of Rights.

 

Notes

[i] Fernicola v. Pheasant Run HOA, No. A-2027-08T1, N.J. Super. App. Div., July 2, 2010.

[ii] Under the Federal Tort Claims Act, the government can be sued for negligent acts or omissions that need not rise to the level of willful or gross negligence. See Tort Law for Legal Assistants, Linda L. & J. Stanley Edwards, eds. p. 218 0 219(Thomsom-Delmar Learning, 3rd ed. 2004).

[iii] Id, p. 86-88.

[iv] See generally A choice for Americans: the US Constitution or authoritarian, private HOA government.

HOA made no attempt to contact soldier in Iraq before foreclosing

As a followup to the Bogcritics article, While Fighting in Iraq, Soldier Loses Home to HOA,  a June 27th article appeared in the Telegraph Herald (Dubuque, IA), reporting that the Heritage Lakes HOA has hired a PR firm to address all the publicity stemming from this foreclosure.  In short, in dispute are the HOA claims that the assessments were owed before going on duty and when Clauer was on active duty,  and that they never knew he was on active duty.  Clauer’s attorney replied that they never even attempted to call him.

 Not addressing the claims and counterclaims, and adding to the justification for HOAs having the right to foreclose, I wrote in my HOA Constitutional Government commentary, “CAI attorney advises negotiate payments in HOA short sales“,

 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 this attitude is reflected in the actions by the Heritage Lakes HOA — we don’t gotta do nuthin’, cause we have the power.

See also the May 2007, Memorial Day: American soldiers are defending a New America, one without democratic protections.

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.