Tag: due process

Too hot for NC HOA committee – withdraws legal-academic “experts”

The North Carolina Select House HOA Committee scheduled a meeting for Nov. 16, as stated by a NC Legislative Assistant,

The meeting notice indicates that the House Committee will “hear from legal and academic experts on matters pertaining to Homeowners Associations. Commentary from the public is also welcome.”

In response, I sent the committee co-chairs, among other issues, my frequently asked, but unanswered, questions:

I ask the legislators, the public interest organizations and policy makers to consider the following questions:

1. Is it proper for the state to create, permit, encourage, support or defend a form of local government of a community of people, whether that form of government is established as a municipal corporation or as a private organization that is not compatible with our American system of government?

2. Is it proper for the state to permit the existence of private quasi-governments with contractual “constitutions” that regulate and control the behavior of citizens without the same due process and equal protection clauses of the 14th Amendment; that do not conform to the state’s municipal charter or incorporation requirements; or do not provide for the same compliance with the state’s Constitution, statutes or administrative code as required by public local government entities?

3. When did “whatever the people privately contract” dominate the protections of the US Constitution? The New Jersey Appeals Court didn’t think so. Does “constructive notice”, the “nailing to the wall”, the medieval method of notice, measure up to the requisite level of notice and informed consent to permit the loss of Constitutional protections?

4. Please state what, if any, are the government’s interests in supporting HOAs that deny the people their constitutional rights?

I await your reply, or a reply from any of the legal-academic aristocrats.

The response from the committee later that day was,

The agenda for tomorrow’s meeting has changed, and instead of the legal and academic experts, it will be Research Staff from the General Assembly who are presenting information on past actions dealing with homeowner’s associations. There is NO public comment tomorrow.

There you go again! No one, including all those so called public interest nonprofits who claim that they are fighting for individual rights, has dared answered these questions. Welcome to the New America of HOA-Land.

See The CAI ‘Philosopher-kings’ are best to rule HOAs?

 

Call for HOA action: “Occupy Wall Street” vs. Occupy the Legislature

“Occupy Wall Street”! What a way to get attention! How about an “Occupy the Legislature” demonstration against unjust and unfair HOA foreclosures with their intimidation, threats, and cruel and unusual punishment? In every state — especially Florida, Nevada, Arizona, Texas and California.

The pro-HOA supporters’ reason for the need for foreclosure rights can be found in the defective HOA legal scheme that is similar to a partnership. In partnerships there are a limited number of financial supporters, the owners, who are jointly and severally responsible for all the HOA debts — those with the money pay for those without the money. A legality. And like a privately held small business, the financial base is relatively small and limited to the homeowners who have very little practical means to escape their obligations by leaving the HOA.

Those who feel that foreclosure is needed need to ask themselves, Does the means justify the end? An “I don’t care” response is unacceptable, and legitimizes the authoritarian HOA government. Foreclosure is a special law for a special group that violates state constitutions — the equal protection of the laws, special laws for private organizations, and “color of law” constitutional violations. No state has declared its intent or purpose for the statutes – they wouldn’t dare – that justifies a legitimate government interest that can withstand judicial review of the statute. And that review is a strict review that looks to a necessary and compelling reason to deprive citizens of their rights.

And remember, there is that huge cloud hanging over the genuine and freely given, after full knowledge of all the material facts, consent to the CC&Rs. CC&Rs, a real estate doctrine based on equitable servitudes and not constitutional law, do not legally require an explicit signature or explicit surrender or waiver of constitutional rights, or for a bona fide consent to be governed by the de facto HOA political government.

Homeowners must let go of their irrational fears that the HOA would be shut down. They must stop their blind adherence to the CAI chant of “no government intervention” that really is a belief that HOA governments, unaccountable to the Constitution and state governments, are far better than public government with its police powers to protect citizens from abuse by other citizens.

An Occupy the Legislature movement is a grass roots, ground level action. It must come from local homeowners organized under local leadership, behind a fixed purpose. And right now, “Stop HOA foreclosures” is a very appropriate mission.

See HOA foreclosures:  will the real CAI stand up

HOA foreclosures: will the real CAI stand up

In reading the Carpenter Hazlewood (CHDW) October 28, 2011 eNewsletter, Lien Foreclosure: Is it Still a Viable Option?, I asked myself : Did the CAI attorneys lack “candor toward the tribunal” (as required by attorney Professional Conduct Rule 42, ER 3.3, as can be found in all states) when opposing foreclosure reforms all these years? It seems that CAI presents more than one personality, more than one face, depending upon its audience. CHDW (and CAI firm Ekmark & Ekmark) had vehemently opposed foreclosure reforms as far back as 2004 when, in Arizona, HB2402 sought relief and justice for homeowners. Never once did the legislators hear what is now admitted to in this article by Ms. Patel.

The following excerpt from Who prosecutes on behalf of homeowners in HOAs? (2010) reveals the attitude of CAI lawyers in 2004. Through the questioning and testimony of Ms. Koepke (Ekmark & Ekmark) by the FMPR committee in February 2004 (based on the audiotape record of the committee hearing), we learn,

In her testimony Ms. Koepke had stated that she was an ethical person of integrity who foreclosed only as a last resort upon the instructions of her HOA clients. However, she had a problem with making use of alternative methods of collecting debts as are available to all lien holder in other arenas, and saw no moral issue with completely stripping the homeowner of all his equity for a few pieces of silver. Her justification was that they were “scofflaws” who needed to be punished to deter future untimely payments. In the complete audio, you will hear the committee Chair informing Ms. Koepke that such actions were “unconscionable.” I added a commentary as an addendum, which presented a few background cases and incidents in which Ms. Koepke was involved. This short commentary video can be found at Foreclosures.

A few important questions not answered by the CAI attorneys are: 1) Why should the HOA be allowed foreclosure rights when it has not advanced any real, hard cash like a bank or other lender? 2) Why aren’t alternative means of collection, as available to all other entities, not satisfactory? and 3) Why this special right for HOAs?

The current Patel article, addressed to HOA directors and managers not the legislators, shows another attitude toward HOA foreclosure.

Assuming foreclosure eligibility requirements are met, whether foreclosure is a viable option depends largely on what other liens, interests, and encumbrances burden the subject property. . . . If the property is not subject to a mortgage or there is a minimal first mortgage, foreclosure is a viable option as there is likely equity in the property. . . . Even if the property is subject to a recorded first mortgage and there is no equity in the property, foreclosure still may be a viable option. Sometimes the threat of foreclosure alone is enough to get a delinquent owner’s attention. . . . the owner will often pay the association in order to keep his/her home.

This is an admission of the discriminatory nature of the foreclosure process — works only if the homeowner was an upstanding citizen who had paid his mortgage and assessments for many years, and had created all that equity that the HOA now seeks. It is also an admission of the punitive and intimidation motives of the HOA — “the owner will often pay the association in order to keep his/her home” — without facing the reality that “you can’t get blood from a turnip”! What the foreclosure process does do, and is not mentioned by these CAI attorneys, is that the attorney can claim fees many times in excess of the amounts owed the HOA.. So, who really benefits? Is this good public policy?

Important questions for all homeowners:

1. What are the CAI attorneys telling your legislators today?

2. Are they being candid with the legislators, or are they pursuing their — the CAI, not the HOA – personal agendas?

3. What are you doing to make sure the legislators are being given the whole story?

 

For further reading . . .

Special Message to McCain and Obama on Homeowner Protections in HOAs

Right to Foreclose laws are supposedly good for HOAs, so why are fees increasing?

Do HOA foreclosures violate 14th Amendment?

Homes in HOAs are Lifetime Collateral for HOA Survival

AZ OAH Constitutionality of HOA adjudication still lingers

In the first OAH Petition filed, 11F-H1112001-BFS, the North Slopes HOA filed a motion to dismiss, partly based on the unconstitutionality of the statutes. It was a feeble claim, especially coming from a national law firm. The ALJ, at the Oct. 19, 2001 pre-conference hearing, stated that the statute was constitutional until a court decision said otherwise. The HOA attorney then stated that it was filed to allow the question to be raised in a superior court appeal.  Here we go again!

My feeling is that we will continue to see constitutionality challenges as one of several defenses in future Petitions, and not as  the main focus of the defense, which  we saw with the repeated CAI attorney challenges.

AZ legislation needed to insure justice and to stop OAH abuse

Legislation to stop further HOA abuse at the Arizona Office of Administrative Hearings is in order today. Signs of potential abuse are surfacing, and we must act ASAP to stop it immediately.

From the OAH website, “Pointers” link, here’s what OAH has to say in 2001 about pre-hearing conferences: THE PRE-HEARING CONFERENCE – IT WORKS (emphasis added).

Once a request for a hearing date is filed with the Office of Administrative Hearings, the parties can expect a setting within a quick and short time, leaving a precious minimum of adequate time for pre-hearing discovery and preparation. A pre-hearing conference will help counsel and parties to get around these two obstacles. Both discovery and a reasonable timeline – which will insure better preparation for an effective hearing – can be obtained through a pre-hearing conference. Early settlement discussions can also be triggered. . . . One possible negative of an early request, however, is that the other side may not be fully prepared, but this exposes a situation that you may wish to know early.

The above reads much like the “quick and dirty” technique — my words — of a motion for summary judgment, legal as it may be. It contains contradictory assertions that justice will be served due to pre-hearing conferences, and that the “other side may not be fully prepared, ” which in our HOA context applies to the Pro Per homeowner.

It appears that the two Petitions invoking the pre-hearing conference, of the first 3 OAH Petitions, reflects a move to “get the case quickly closed.” Note that the pre-hearing conference must be requested, and we know by whom, or by the sua sponte by the ALJ, “on his own”. My recollection of the initial 2006 – 2009 phase recalls just a few pre-conference hearings. The 2001 belief, unsupported in the HOA adjudication environment where the homeowner does not use an attorney, states,

Once a pre-hearing conference has been held, the Administrative Law Judge and counsel will know each other better. Subsequent status or telephonic conferences are easier to have once everyone knows each other better. Therein lies a powerful but not always evident benefit of an early pre-hearing conference – positive rapport and trust can be established among the participants.

There is a legitimate concern of an abuse of process. The belief expressed above assumes that the HOA attorney is acting in good faith and not abusing the process. However, 2008 legislation, in particular HB 272 4 and SB 1162, challenged this assumption (sadly, they were defeated). See Arizona HOA cases update — OAH and HOA adjudication at OAH: a rebirth of constitutionality, abuse, and legislation. There is no reassurance that justice will be done by this procedure — this is NOT civil court, and to turn OAH into civil court only serves the HOA attorneys.

There is no mention of allowing the homeowner to revise his Petition or Response, or to extend the hearing date, or to allow more time for discovery by the homeowner. The important value of OAH adjudication is to level the litigation playing field in the interest of fair play and justice, and not to force the homeowner to hire an attorney to deal with the rules of civil procedure as used in the courts. And I have a further concern, because (emphasis added)

Under the rules of the Office of Administrative Hearings, the Administrative Law Judge is not required to memorialize the outcome of a pre-hearing conference (see OAH procedural rule 19-112). Therefore, the best practice is to request that the Administrative Law Judge issue a written pre-hearing order memorializing all directives and agreements.

This means no minutes and no audiotaping which served the interests of justice so well in the first go-around of OAH adjudication in the 2006 – 2009 period. These invaluable hearing audiotapes exposed the conduct and attitudes of the HOA and its attorneys, allowing the public to hear the nature of the HOA’s evidence and justifications for its actions. It is hard to reconcile their performance at OAH with their public statements implying a good faith, for the community, motive.

It appears that the HOA attorneys, like their HOA clients, do not want the public to know what really goes on in HOAs — hurts property values. Homeowners demand justice and fair play, and expect the Legislature to act accordingly and to protect them from abuse — helps property values.