Tag: due process

Findings of the 2011 Colorado HOA problem report

The findings of the Colorado HOA problem identification report are as follows, and substantiate the fact that HOA democratic governance is sorely lacking:

 

What we discovered was that the complaints we received primarily involved the board of director’s failure to follow corporate governance rules and procedures of the HOA; the transparency of the board of directors, particularly as it related to the finances of the HOA; and harassment and bullying of homeowners by the board of directors and management company by arbitrary fining, preclusion from providing input into the associations’ affairs, and verbal harassment. These complaint types were much more serious than the aforementioned three P’s because they substantially interfered with a homeowner’s ability to enjoy his property and to have avenues of democratic participation in the HOA to remedy their issues.

An additional and perhaps one of the more troubling complaint types the Office heard was that the HOA board or manager was harassing, discriminating or retaliating against homeowners. Many homeowners felt that their boards had singled them out and were arbitrarily fining them for violations, when they were not in violation; engaging in selective enforcement of covenants; and precluding them from participating in meetings. . . . A frequent complaint heard was that older board members were discriminating against younger homeowners or where older homeowners felt they were discriminated against by younger board members.

 Another troubling subset of complaints involved diversion, fraud, and theft. . . .  The most frequent complaint types filed against managers mirrored those pertaining to HOAs, including access to records, transparency and communications, not communicating with homeowners, harassment and selective enforcement of covenants

 

And the report makes the following, not unexpected, observation, which can apply to all HOA legislation in all states (emphasis added).

 

The drafters of SB-100 and SB-89 obviously understood the need for statutory protections to homeowners, but the issue homeowners are having is not that the law does not address their specific issues, rather the law does not provide a realistic or economic means to seek redress.

 

 The lack of such realistic means for redress can be found in the public policy of each state to support and protect the HOA even against unjust and unconstitutional denials of homeowner rights and freedoms.  One very effective and proven means is to provide for effective penalties against HOA violations of the laws and governing documents in the name of the people.  That means sufficient fines and even misdemeanor charges as warranted, especially when considering such penalties are imposed for wrongdoing by a government official or agency.

 References

1.       Colorado report on HOA problems needs to be corrected.

2.       “Hannaman Report”, (Similar report in NJ, 2002).

3.       The StarManPub  videos on the Florida House HOA hearings (2008).

 

Colorado report on HOA problems needs to be corrected

The Colorado real estate department issued its first report on the state of HOAs and condos for 2011, raising some questions of integrity. A total of all the complaints in the chart shows 893 complaints, or almost twice as many as proclaimed. In fact, totaling the listed percentages show almost a doubling to 194.2%. See the chart link below, where “adj pct” is the “normalized” percentages.

The normalized analysis shows that all the complaint types that can safely be attributed to governance issues, the top 16 in the table, make up 84.3% of all complaints. And, those 4 explicitly stated management complaint,  amount to 31.1% of all complaints.

If those in power refuse to face the reality before them, then they live in a delusional world where effective reforms can never occur. And where there are unjust laws, then the government is seen as illegitimate and not representative of the people who are the State of Colorado.

See Colorado report

Wrongful death suit filed against California HOA

A wrongful death suit was filed against California HOA by homeowner’s family. As I wrote in, If Trayvon HOA is sued, who should share the blame?, there’s a lot of blame to go around for creating an atmosphere that the HOA has a “free ride” and is immune from accountability.

According to the lawsuit, the defendants knew by September 2009 that Olga Martinez had a restraining order against her husband, Napoleon E. Castro, and that he posed a potential danger to her.

It was expected that defendants would provide a level of care in whom they admitted to the secured housing area in the gated community and restrict unauthorized visitors,” the suit states. “Defendants breached their duty of care by permitting …Castro to enter the building.”

 

(My emphasis).

Daughter of slain Pacoima woman files wrongful death suit against condo complex’s HOA

Looking for justice in an HOA? Look here first!

In the recent California case, Sui v. Price, the plaintiff owned a van for 12 years, and parked it in their reserved parking space. For the past 4 years, the van was inoperable due to a damaged engine, but remained locked in the parking space.

In 2006 Price, the HOA president, caused an amendment to the Rules prohibiting inoperable cars to be approved, and had the van towed. Where have we heard this before? A $1,700 fine was levied on Sui, which affected his credit rating and ability to refinance his home. The homeowner sued for breach of contract and several tort claims, based on an intent to harm the plaintiff, and sought $58,000 in punitive damages. Another case of the effects of ex post facto amendments, when the doctrine of estoppel by laches would be very applicable in favor of the homeowner.

There is no statement of ”an unsightly intrusion” caused by the van with a damaged engine — no fact of a beat-up body, or no tires, etc. California law allows the removal of a vehicle in violation, presumably after 96 hours of notice. The complaint was dismissed. The court dismissed the fact that Sui was just one individual with an inoperable vehicle, and that the CC&Rs prohibit rules that discriminate against member.  Forget about the holding that the CC&Rs supesede the Rules.

The court only looked to the the reasonableness of a covenant, relying on,

Simply put, there is nothing unreasonable about prohibiting the open, long-term parking of disabled vehicles. The association was perfectly reasonable in prohibiting this unsightly intrusion upon the aesthetics of their common interest development. (emphasis added).

 

And that is the danger of the “general interest or general purpose” doctrine – almost anything can be rationalized and justified when isolated and only considered by itself. So the court chose – it was a validly passed amendment, and those other, unaffected members, could undo the amendment. Is this communalism or socialism?

We see no reason to apply a different test for reasonableness of an association’s operating rules, especially since a rule adopted by the association’s board may be reversed by majority vote of the homeowners at a meeting called on petition of only 5 percent of the separate interests in the association. (emphasis added).

Here again the court diminishes individual rights for a perceived common good of the community in what many would call socialism.  It’s disturbing that the homeowner in these cases is not compensated for a loss in benefits by being a member of the community, while others are held to benefit. Another overlooked requirement for upholding valid amendments.

In the public arena, the homeowner would have received compensation for this “taking.”

If Trayvon HOA is sued, who should share the blame?

As indicated in the media and earlier (What is an HOA’s duty of care liability to its members and to all others?), the HOA could be sued under a number of legalities as determined by the facts.  It is important to ask what factors led to the use of Zimmerman by the HOA.   Under the legal doctrine could  the homeowner members and even the public policies of the state that amount to a “hands-off” accountability toward HOAs — they can do no wrong — be held liable?

The latest media report (Homeowner association could be sued in Martin case) reminds everyone that the homeowners would most likely have to reach into their pockets.

“So, if you’re going to send out a newsletter saying, ‘Hey, he is the captain. Whatever he says goes,’ you have now basically rented a free police officer for your neighborhood,” Clark said. “He certainly took on that role with the homeowners association, and it seems to me that they recognized that.”

Who would pay in the event of such a lawsuit would probably be determined by the type of insurance coverage the association has, Clark said. Some policies may be wide enough to cover Zimmerman’s actions. If there is no policy or the policy in place is very narrow in its coverage, homeowners likely would have to pay out of their own pockets through higher monthly assessment fees because most associations don’t have very deep reserves, he said. He noted that policies typically cover about $1 million.

Many will cry out that it would be unfair and just to make the homeowners pay for the neglect, if true, by the board.  But would it?   It is obvious that the board of directors, the legal body responsible for managing the HOA would be first and foremost.  But what about the homeowners themselves, who have oversight control through the election and recall of board members?

 Under a “ re ipsa loguitor” (a form of circumstantial evidence that permits a reasonable person to surmise that the most probable cause of an accident was the defendant’s negligence) theory, do the homeowners have a share of the blame in actions by the HOA’s agents?   Would the fact that HOA members are well known to apathetic with respect to the acts and actions of their elected boards absolve them of any failure to act?

In turn, the homeowners could argue that the homeowners’ hands are tied, for the most part, by the adhesion contract CC&Rs that permit an imbalance of powers to the HOA over the rights and liberties of the members, and by statute. That the ineffective  pro-HOA state laws reflect a public policy in support of the survival of the HOA at the expense of the homeowner.  (See The public policy of the states with respect to HOAs).

Laws that have no enforcement penalties against HOA board wrong-doing may explain some of the members’ apathy  — “What’s the use?”  You can’t fight city hall.”  Laws that Alexander Hamilton called, “recommendations.”   “If there is no penalty [for] disobedience, the resolutions or commands which pretend to be laws will, in fact, amount to nothing more than advice or recommendation.” (Federalist #15).

It is difficult to understand the rationality for this hands-off policy that flies in the face of our system of governance, with its checks and balances and separation of powers doctrines felt necessary to restrain the power of government.   “If angels were to govern men, neither external nor internal controls on government would be necessary.” ( James Madison, The Federalist papers, # 51).

In answer to the question posed here as to who should share the blame, the answer must be “all the above.”  And state legislatures are in the power seat to make the needed changes to fulfill the special interest propaganda of healthy and harmonious communities. All that the state legislatures have to do is to do justice and  SAY NO to the special interests!