democracy – Page 30 – HOA Constitutional Government

Mortgage industry – developer cooperation for HOA survival

Does the mortgage industry collusion extend beyond just foreclosure to a broader tit-for-tat, “one hand washes the other” cooperation with HOA developers? Ever wonder why your CC&Rs contain a 20 -30 year “no terminate” clause? Or why your CC&Rs contain archaic and ignored wording that the first lender must approve any CC&R changes? Or why there’s that PUD rider attached to your mortgage?

In order to understand the “why” we must go back in time to the period of the original promoters of the legal scheme for planned developments with homes associations. That was in 1964 with the publication of the HOA mass merchandising document, the Homes Association Handbook, Technical Bulletin #50, by the Urban Land Institute. (For an analysis of this document see Part I of The Foundations of Homeowners Associations and the New America). The document was one that spoke of a utopian scheme for better communities, which would also make tons of money for the developers and promoters. In 1964, HOAs were a new concept that had to be sold to all the “players” in order for the concept to succeed and, as with any new venture or concept, it came with high risks. One question for these mass marketeers was how to get funding from banks and mortgage companies to finance the development of planned communities, and subsequent HOA home mortgages. It was a question of insuring the survival of the HOA and, consequently, its marketing success.

First, the right to foreclose. One way was to come down hard on homeowners who didn’t pay their “fair share” and threatened the survivability of the HOA: create covenants that run with the land granting the HOA automatic liens for assessments and the right to foreclosure for non-payment. And, since there may be instances where there would be insufficient funds, as they recognized the second position status of the HOA, it was necessary to include a grant of right to seek a personal judgment against all of the assets of the non-paying homeowner. All in the name of survivability of the HOA for the future success of the promoters. (See Section 12.3 and 12.31 of the Handbook).

They were not concerned with constitutional and legal issues relating to democratic governance and protecting the rights, freedoms, privileges or immunities of the member-owners. They could not tolerate democratic protections by means of independent tribunals and so gave themselves, as Declarant, dictatorial rights over the community. The developers had to stay in control to protect their investments and profits.

Second, “sweeteners” for the lenders. With these strong measures to protect the HOA income stream from non-payers, who, by the way, may dislike the way the HOA was operated and want to withhold payments, they could now approach the mortgage companies and banks. They gave the lenders additional protections to get them on board – the HOA cannot be terminated until after the first 20 -30 years of operation, even though the developer no longer had any obligations to the lenders – he was long gone and had paid off the lenders.

So, why this “no terminate” clause? Why the PUD rider on individual home mortgages not owned by the HOA, that holds no title to the individual home? Why should the lenders want additional assurances when they got none of these with traditional, non-HOA homes? Why were they given these “sweeteners?” As an inducement so they would make loans in support of this unproven concept?

It appears that this was all for their mutual benefit, at the expense of the unsuspecting home buyers.

Psychologist defines the HOA Syndrome caused by oppressive HOAs

Psychologist, Dr. Gary Solomon, a professor at the College of Southern Nevada, has advanced a definition of the HOA Syndrome, a disorder not too different from Post Traumatic Stress Disorder (PTSD). He describes the syndrome as,

HOA Syndrome falls into the psychiatric category of Anxiety Disorders. The Syndrome is characterized by a cluster of signs and symptoms– psycho-physiological indicators – such as:

feeling angry much of the time

anxious

on-edge or irritable

unhappy in one’s own home

depressed and sad

worried

nihilistic (hopeless)

sleeping disorders and/or nightmares

fear of going to one’s own mailbox,

paranoia

fear of allowing one’s children to play in their own neighborhood

fear of having one’s car ticketed or towed

stressed out

hyper-vigilance

restlessness

fear of losing one’s pet

The cause of this disorder, according to Dr. Solomon, lies in,

[T]he HOA strategically begins to focus on the homeowner’s minor, if not non-existent infractions. The purpose for these attacks is to create an income stream. This income stream makes its way into the pockets of the management companies, collection agencies and attorneys, none of whom live within the community that they are harassing. Like ravenous parasites, these organizations feed off of fear-based harassment. The homeowner, now locked into a mortgage, feels powerless over the HOA’s relentless hounding for more and more money. In short: the evolution of schoolyard bullying and lunch money stealing has turned into adult comportment known in the legal world as, racketeering, financial exploitation and extortion, and neighborhood money pilfering.

I, myself, have been contacted many, many times over my 10 years of involvement by widowers, seniors, single moms and “youngsters” seeking a resolution to the stress caused by the harassment and ostracism by the HOA through its newsletter or verbal statements, the HOA’s assault on their persons or properties, or the HOA’s slanderous actions. The HOA, or management firm, or attorney do not return calls or answer questions. The homeowner gets just another letter from the attorney with its $150 fee tacked on to the stated monies owed the attorney. In one outrageous flaunting of absolute power, an attorney, who is also an outstanding CIA member, kept on dunning this senior women although she sent the attorney statements from her bank that the HOA had cashed her assessment checks.

These homeowners, who may have opposed the board or one it its friends, or was the target of an unsupported and arbitrary fine, feel helpless because the police, the county attorney, the consumer protection agency, and the attorney general offer no assistance. And when they do try to contact an attorney, and are not rejected because the attorney works for an HOA(s) and won’t take the case, they may find an attorney who will take the case with his standard upfront retainer fee payment of a few thousand dollars. These homeowners feel isolated and persecuted by the HOA board, and the failure of the supposed democratic process within the HOA, which requires participation by “civic minded” neighbors. These neighbors do not exist – “Not my problem”. They, too, also fear the retaliation through fines and liens for opposing the board, making HOA governance a mockery of justice and the democratic process.

Dr. Solomon will hold a seminar on the HOA Syndrome:

October 15, 2010

6:00 to 8:00 pm

College of Southern Nevada-Henderson Campus

Room C133

700 College Dr., Henderson, NV 89002

For more information please contact Dr. Robin Huhn: 702.812.4599

Read the poster.

TN firehouse adopts HOA philosophy — a business entity

If you haven’t heard, a Tennessee firehouse let a house burn down because the owner didn’t pay a subscription fee, above paying his general taxes. The firehouse is operating as a business: revenues = expenses. But, they are a public government entity and not a business!

CAI, in its efforts to avoid having HOAs declared a de jure public entity, and subject to constitutional restrictions, has confused the issue by treating the HOA as a privately contractual business. As I have explained many times (See in general, Understanding the New America of HOA-Lands), government is more than a business, simply based on their objectives — making a profit vs serving the people. The HOA legal scheme as a fascist style of constitution — the state comes first above individual liberties and freedoms, and the objective of the state is corporation/business based. The same as we see with the firehouse.

The purpose of our government is clearly stated in the Preamble to the Constitution, and by the Social Contract (see Understanding) whereby man surrenders his natural rights to government in exchange for protection of their unalienable rights against harmful factions in society, to provided for a smooth and organized functioning of society by setting rules and regulations, by caring for those facing hardships, and by punishing offenders of the society’s rules (criminal acts).

This incident is just but one incident of the blurring of the lines between institutionalized private HOA governments and public government. Our elected representatives are confused about the purpose of government. Government cannot be done away with under dogmatic ideological cries of “government intrusion”, but is necessary for justice, to protect our freedoms, and in no way can be seen as evil while subversive — opposing Constitutional government — HOAs are praised and mandated.

Understanding the New America of HOA-Land

I assembled several of my publications into this eBook format (5.5 x 8.5 PDF) to present a comprehensive view of the substantive issues relating to the HOA – planned community legal scheme. The first 3 booklets represent 16 pages, and the “American Political Government” booklet is a more detailed presentation of some 45 pages.

The cover reads:

“What you need to know about the political and social effects of HOAs on the American way of life.”

“Accepting authoritarian government over democratic government.”

Table of Contents

1. HOAs as an established institution

2. Proposal for muni-zation of HOAs

3. Is there an ideal HOA “constitution”?

4. American political governments

5. George K. Staropoli

Supplemental ebook material (not included):The Foundations of Homeowners Associations and the New America.

Other publications and information can be found at the Citizens for Constitutional Government web site, http://pvtgov.org.

Do homeowner regulations go too far?

So his homeowners association levied fine after fine and put a lien on his home though he’d coughed up nearly $50,000 to pay fines and other related costs. Eventually, his home was foreclosed because Darius still owed $24,591.

On Aug. 15 – after losing his one-story home and two days before he would be evicted – Darius’ next door neighbor heard an explosion about 2:20 a.m. Patti McCallister ran outside, saw Darius’ home burning and called 911.

Firefighters found Darius’ badly burned body lying on the floor of his living room in the back of his home.

Do homeowner regulations go too far? By Matt Tomsic
Matt.Tomsic@StarNewsOnline.com

Sep 3, 2010

My Reply:

HOAs will continue to have serious problems because:

1. They are based on an undemocratic authoritarian legal scheme that does NOT place the individual rights and freedoms of the members first, as does our Constitution, but the monetary goal of maintaining property values.

2. Consequently, this un-American private government exists outside the Constitution and its protections of the people. All the legal court battles are attempts to restore those lost rights.

3. The misleading claims of agreement by homeowners is superficial and would not stand up to judicial scrutiny for the valid surrender of one’s rights. The mere filing of CC&Rs with the county clerk is sufficient to legally bind lot owners, sight unseen, and is a mockery of both Constitutional and contract law.

4. Then there is the unspoken alliance of local governments, state legislatures, consumer protection agencies, and public interest firms who shout “individual rights” and “no government interference”, but see no problem with private government interference. And that also includes CAI.

5. Community Associations Institute (CAI) was formed back in 1973 to address these problems with the HOA legal scheme, yet these problems continue to exist in spite of all that “education” provided for board members, managers, and legislators. Would you hire a training firm with that record? State and local governments seem not have a problem and hire “the failure to get results” CAI.

6. CAI is on record in its amicus brief to the NJ appellate court in the Twin Rivers case, cautioning the court about the “unwise extension of constitutional protections to homeowners” in HOAs. The common law synopsis of court decisions regarding covenants takes a decided editorial opinion rather than a neutral summary of the cases when it states, for example, that if there’s a difference between servitudes law (covenants) and constitutional law, servitudes law should apply (§ 3.1, comment h).

6. The media, even in this article, takes the premise and presumption that the HOA unquestionably has the right to act, and that its motives are pure and for the benefit of the community. None of the above substantive issues are ever delved into.

In order to avoid another 40-odd years of continued injustice and discontent, government authorities and legislatures must address the above issue of substance, and stop their participation in the unspoken alliance of “No negatives about HOAs”.