fair elections – Page 5 – HOA Constitutional Government

CAI: the HOA form of government is independent of the US Constitution

In its amicus brief in the NJ Supreme Court Dublirer case [1] involving free speech in an HOA election campaign, CAI clearly makes the point that HOAs are not subject to constitutional protections and elections processes are covered solely by the HOA governing documents.

These rights of members do not arise from the State Constitution but rather from statutes, contract, the association’s and governing board’s fiduciary duties, public policy and fundamental fairness.

In light of these statutory, contractual and common law standards protecting the interests of community association members, they need not claim constitutional protection from the conduct of governing boards to exercise their rights with respect to the associations.

What CAI is saying is that the pro-HOA statutes that it helped write and the adhesion contracts executed under misrepresentation [2] supersede the protections of constitutional law.

Furthermore, CAI attempts a strenuous argument of “the sky is falling” if free speech was allowed in private HOA communities, which would doom the essential private nature of HOAs.

CAI-NJ’s concern is the attempt to convert private communities into constitutional actors and to open such communities to access not only to speakers from within the community but also to the public, while ignoring contractual agreements and non-constitutional protections.

This case did not deal with outside speakers, but a member running for office and seeking equal access to the membership. CAI then raises another of its favorite “cause celebres” — HOAs are businesses. Read this fantastic argument:

The relationship between the plaintiff and the defendants here is that of a business corporation and so is similar to that involved in any other business corporation. A shareholder who wishes to run for a position on a corporate board has no right to post campaign signs on the corporation’s property. Moreover, if such a shareholder wishes to distribute campaign literature to the other shareholders before the issuance of the corporation’s annual meeting announcement and proxy, such shareholder must do so at his own expense. Dublirer’s position vis a vis the cooperative here is no different. He has no constitutional right to distribute his campaign materials within the cooperative’s property simply because mailing them to the other tenant/shareholders may cost him money”.

This in the trenches argument stands in stark contrast to CAI’s propaganda statements made for public consumption that HOAs are democratic and represent the best town hall democracy in America. If HOAs are businesses, why is the term ‘community” used rather than “cooperative”? For example, like “building vibrant, harmonious, competent cooperatives.”

And finally, CAI makes its last ditch appeal that there are other non-constitutional protections for HOA members so the court need not introduce the Constitution into HOA-Land. Let them remain independent principalities where hired-hand stakeholders like CAI can control and dominate.

This is CAI’s most fearful event of all, that the courts will hold HOAs as constitutional actors or state entities and subject HOAs to the 14th Amendment protections. This state of affairs would be the death knell not of HOAs, but of the need for CAI itself. And CAI well knows and fears this eventual outcome.

These views by CAI before the courts and not propaganda for public consumption must be made known to the media and to all state legislatures and legislators. Then the legislators must be asked where they stand? Behind the Constitution or behind CAI?

Notes

“BRIEF OF PUTATIVE AMICUS CURIAE COMMUNITY ASSOCIATIONS INSTITUTE – NEW JERSEY CHAPTER,” Michael S. Karpoff, Jan. 3, 2013 (Dublirer v. 2000 Linwood Avenue Owners Assn, N.J. Docket 069154 (2014)).
Misrepresentation: CAI comes with unclean hands.

CA CAI opposes fair election protection for homeowners

In last month’s California appellate court decision in Wittenberg v. Beachwalk HOA,[i] the court upheld HOA fair elections procedures. Homeowners are to be given equal opportunity to express opinions in opposition to those of the board, in and on the same media as used by the board. The common practice in most HOAs is to deny members equal access, which has extended in many cases to the denial of membership records and intimidating members from conducting door-to-door campaigning.

The record shows that Beachwalk had engaged in practices found in many other HOA instances:

1. Holding multiple elections until the proposed amendment was finally passed,

2. The ballot and cover letter expressed only the board’s recommendations on the amendment,

3. The board made exclusive use of the HOA newsletter to promote its views, refusing a request by a member to comment on the election, and

4. Denying a member the use of a fee paid “renter” room to hold a rally against the amendment.

The court explained, my emphasis,

This plain English definition [of advocacy], which we adopt, is consistent with the overall nature and purposes of section 1363.03. Subdivision (a)(1) was part of a bill that sought to “provide substantial new voting protections” to members of homeowner associations designed to “guarantee that basic democratic principles are in place during elections,” which had previously been “contaminated by manipulation, oppression and intimidation of members, as well as outright fraud.” It is thus remedial in nature. “A statute which `is remedial in nature and in the public interest is to be liberally construed to the end of fostering its objectives . . . . `The rule of law in the construction of remedial statutes requires great liberality, and wherever the meaning is doubtful, it must be so construed as to extend the remedy.””

The intent of the court is clearly an example of the Enlightenment Movement after some 49 years since the creation of the first HOAs in this country. While the court upheld California’s HOA fair elections statutes, the California CAI Legislative Action Committee opposed the decision in support of democratic functions in HOAs.[ii] This position is in conflict with the CAI policy that HOAs are “one of the most representative and responsive forms of democracy in America today.”[iii] Unless, of course, CAI has some distorted view of democracy. In fact, CAI California is seeking support to appeal the decision to the California Supreme Court.

Notes

[i] Wittenberg v. Beachwalk HOA, NO. G046891 (Cal. App. 4th Dist. June 26, 2013).

[ii] “Appeals Court Ensures Equal Access During Elections”, Blog of the Community Associations Institute California Legislative Action Committee, July 9, 2013. (http://caiclac.wordpress.com/2013/07/09/appeals-court-ensures-equal-access-during-elections/).

[iii] “A FORM OF DEMOCRACY. Community associations are one of the most representative and responsive forms of democracy in America today. Residents of a community freely elect neighbors to serve on the board of directors of the community. Numerous other owners or residents serve on committees and help with special tasks as they arise.”, Section 8 in An Introduction to Community Association Living (2006), http://www.caionline.org/events/boardmembers/Documents/IntroToCALiving.pdf.

Proposed HOA Study Committee issues of substance

The following topics have been proposed as issues of substance for the National HOA Member Citizens League Study Committees,

Have homeowners given their consent to agree to the governing documents and to the waiver or surrender of their rights and freedoms as citizens?
Are fair elections procedures needed to protect the democratic right to vote for HOA directors and/or officers?
Are HOA members being denied due process protections as are provided public government?
Is the right for HOAs to foreclose on homeowners an effective and legitimate method to collect assessment debts?
Are HOAs being given special consideration by state legislatures by not subjecting the boards of directors to punishments and monetary penalties for violations of state laws and the governing documents?
Are HOAs state actors?
Are HOAs de facto but unrecognized political governments?
Should HOAs be made subject to municipality statutes rather than corporation statutes?
Should directors be required to take courses in government and nonprofit management?
Should HOA managers and management companies be licensed and subject to random audits?

For more information on the HOA Organizational Development fresh approach to HOA reforms, and the National HOA Member Citizens League pro-con study committees, see HOA Organizational Development.

A further explanation of HOA Organizational Development

The HOA apathy affliction: a political dynamic

Everyone is unhappy with the pronounced apathy among those living in HOA-Land, where the lack of homeowner protections works for the power-elite, the board and its attorney. CAI has complained many times about apathy when homeowners complain about the conduct of their boards. CAI also complains how it can’t make “necessary” changes to the CC&Rs to bring them current with the laws.

Because of this apathy, homeowner advocates who are aware of the inequities of their HOA predicament cannot get their good neighbors — those who pay their dues and obey the rules — to support them in their efforts to obtain justice for all members.

A recent approach being used by CAI in Arizona is to call for the complete rewrite of the CC&Rs to make the HOA a better place, the ostentatious reason, while including even more oppressive covenants and covenants that are highly favorable to the HOA attorney and its income stream. In order to accomplish this, recourse is made to playing loosey-goosey with the strict Arizona laws for amending the CC&Rs.

The law requires a written explanation of each and every change being made, which can be cumbersome, but the law is there to protect the homeowners. It’s a cost of making sweeping amendments all at once. But the homeowners say and do nothing except to sign away their rights as good team players.

The political impact of these sweeping changes is made real by the apathy of the majority of the homeowners to agree to whatever the board proposes with the blessings of the HOA attorney, who wrote the revised CC&RS. They can affect your pocketbook, your property rights, and your already weak voting rights.

A common change, minority control, was defeated in the 2011 legislative session that permitted minority control of the amendment process, thereby giving the political machine in power basically complete control of the HOA and over its apathetic members. This political tactic relies on homeowner apathy to succeed. It removes a vote of all the members and the long held doctrine of a supermajority vote, usually 67%, and replaces it with a majority vote of only those voting.

Even with a 50% quorum as little as a 25% approval can affect the rights of ALL members, whether they agree or not. And with the pro-HOA laws and unconscionable adhesion CC&Rs contract, the members will be just pawns in the hands of the board – just pay your dues and shut up, or else!

Homeowner apathy is a serious affliction in HOA-Land. Under the current environment, it is the homeowner who must stand up and fight for his rights, in the HOA and at the legislature to change the laws.

Read about the Fourth Amendment to the Apache Wells CC&Rs, one real example. Just scroll down.

Can HOAs be democratic without fair elections?

A homeowner rights advocate raised this very “on point” question: Is buying votes in an HOA election illegal? I initially answered that I was not aware of any explicit restrictions in the statutes, the governing documents, or in case law. However, after reflecting on it for a while, I found arguments relating to the justification of the authoritarian HOA regimes and the need for a right to vote by the members.

Restatement Third, Servitudes, Ch 6, Common-interest communities (2000):

6.16. Representative Government.

(c) Election of governing board. . . . [E]lection procedures must provide a reasonable opportunity for eligible members to become candidates for election and to make their views known to the electorate, and a reasonable opportunity for eligible voters to cast their votes.

6.18. Meeting and elections. [nothing here addresses the question of fair election procedures and protections of a members’ election to the board].

Comment (a) speaks to a servitude (covenant) on a member’s right to participate in the governance of the board. It justifies the HOA control over subdivisions with,

One of the primary justifications for permitting . . . servitudes that subject property owners to the often extensive powers of the [HOAs] to affect their property values and quality of life is that the members have the power through the political process to control the actions of the association.

What a false and erroneous statement about the political power to effectively control the board. It reflects an “ought be” rather than as “is”. This erroneous statement, relied on by the courts, was made from high above by the legal-academic aristocrats who wrote the Restatement! There are no fair elections covenants and procedures in the HOA legal scheme to protect the people that come anywhere near the laws governing elections in the public realm. And, in my view, deliberately ignored along with all other 14th Amendment protections of due process and the equal application of the laws.

The “comment (a)” excerpt was just lip service. How on earth can homeowners be effectively empowered in a corporate form of governance, under an adhesion contract written in favor of the business interests of the developer, and one that protects the interests of the HOA corporation over the individual rights of members? To plead ignorance of constitutional law 101 and government law 101 is ludicrous! This treatment with its lack of concern for constitutional protections can only be viewed as intentional.

Why do I argue that the lack of constitutional protections is deliberate? There are several self-evident reasons, but let me trace the origins of why the “voting makes the HOA democratic” defense came about, and why it was necessary to make this misleading argument. In several prior posts over the years I made reference to the Homes Association Handbook, Technical Bulletin #50 (published by the Urban land Institute in 1964), as the “bible” for the modern incarnation of homeowners associations. In the Handbook we find parallel statements on voting and the need for democracy in HOAs. Here are excerpts as can be found in The Foundations of Homeowners Associations and the New America, Part I, The Homes Association Handbook, p. 17:

The other [as opposed to a bureaucratic style of leadership] requires more participation in order to give members a feeling of satisfaction with association operations; it may be called the ‘democratic style’.

The members can always fall back on democratic controls provided in the bylaws [the corporate governance form of bylaws] to exercise their power to correct a situation . . . . But usually members will not involve themselves in active participation.

The right of every homeowner to membership and to vote is, in our opinion, critical to the strength and success of an automatic homes association.

Because the articles and bylaws of a corporation are relatively easy to change, further strength will be lent to this arrangement [that mandatory assessments require mandatory membership] by inserting a provision governing membership and voting rights in the association in the text of the declaration of covenants and restrictions.

The above accurately reflects the lack of treatment of constitutional protections or any concerns for establishing a working form of government equivalent to public government. This intentional disregard of the protections of individual rights has remained over the years, and its influence on the legislatures and courts can be seen in numerous incidents.

As examples: the 2007 Twin Rivers free speech case where servitude law was given dominance over constitutional law; and in the 2009 declaration by an Arizona superior court that an independent tribunal, the state’s administrative hearings function, was unconstitutional, but the “kangaroo” HOA courts are not.