full disclosure – HOA Constitutional Government

Rebuttal to CAI’s defense to GEICO advertisement

My response to CAI’s statement below is simple: “Facts are the enemy of truth” (Man of La Mancha play, Cervantes). With all the gall CAI tells GEICO to seek the truth and read its Satisfaction Surveys and see how much HOAs are beloved.

I am forwarding my Restoring the Lost Constitution To HOA-Land collection of publications and allow GEICO to make an informed decision.

In response to GEICO Insurance’s “HOA Cynthia Advises New Neighbors” commercial, Community Associations Institute (CAI) is deeply disappointed by the company’s inaccurate portrayal of homeowners associations and the 2.5 million volunteer board members elected to serve their communities.
GEICO’s attempt at comedy about a family moving into a community association is disrespectful and insulting to the millions of volunteers and hundreds of thousands of professionals who work tirelessly and proudly to build communities people are proud and privileged to call home. Community associations, also known as condominiums, homeowners associations, and housing cooperatives, are home to 73.5 million Americans.
Learning the facts about HOA living is so easy to do, a caveman could do it. According to the 2018 Homeowner Satisfaction Survey, independently conducted by Zogby Analytics for the Foundation for Community Association Research, residents in associations are overwhelmingly in support of their community association experience, manager and elected board members.
These are the facts and not the easy, stereotypical and condescending messages designed to get a cheap chuckle.
CAI invites GEICO to take 15 minutes to discuss the value of community associations and how they bring people together, strengthen neighborly bonds, and promote a sense of belonging—especially now.

Thomas M. Skiba, CAE
Chief Executive Officer
Community Associations Institute

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George K> Staropoli is inviting you to a scheduled Zoom meeting.

Friday June 5, 2020, 11:00 (PDT)

Join Zoom Meeting
https://us04web.zoom.us/j/75404878746?pwd=ZWlHVXREVW9XZGZTVmxwTlNzVS9YUT09

Meeting ID: 754 0487 8746
Password: 1tQrX2

HOA-Land Nation publication to aid constitutionality

The important question of HOA constitutionality has generally been avoided and given token lip serve by all interested parties: homeowners, homeowner rights advocates, state legislators, real estate departments, attorney generals, nonprofit private entities proclaiming a defense of the Constitution, and the media at large.

Even the renowned Wayne Hyatt’s^[1] statement in 1976 went ignored.

“One clearly sees the association as a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government. All of these functions are financed through assessments or taxes levied upon the members of the community, with powers vested in the board of directors, council of co-owners, board of managers, or other similar body clearly analogous to the governing body of a municipality.”[2]

Clearly challenging the constitutionality of the HOA model of local government and legal scheme is well beyond past due. To correct this horrific and inexcusable oversight I have published, The HOA-Land Nation Within America,[3] a white paper, an exposé of the HOA legal scheme violations of the Constitution. The eBook and paperback editions can be found on Amazon.

This task of constitutional HOA reforms may appear overwhelming and almost impossible to achieve, but constitutional HOA reforms can happen. It will take tremendous effort and perseverance, and a “never give up” mentality. David Cole passionately makes this point[4]

“If Americans now and in the coming years insist that . . . our most fundamental values, including equality, human dignity, fair process, privacy, and the rule of law, and if we organize and advocate in defense of those principles,” we will succeed in bringing about the necessary fundamental and constitutional reforms to the HOA legal scheme in existence since the HOA “bible” was released in 1964. In order to accomplish this important task, “it will take a persistent civil society, a vigilant media, brave insiders, and judges and other government officials who take seriously their responsibility to uphold the Constitution. But first and foremost, it will take an engaged citizenry.”

“The defense of liberty depends . . . on citizens engaging collectively to fight for the values they believe in. . . . The preservation of liberty through a written constitution . . . has survived . . . because ‘we the people’ have consistently taken up the charge to define, defend, and develop liberty in our own image, so that it reflects our deepest commitment , not just those of a privileged elite who do not represent us.”

It falls upon the homeowners in HOAs, as has always, to advance constitutional arguments that are valid and credible. And that takes knowledge and understanding of the issues. The HOA-Land Nation, and other of my publications and Commentaries, as well as those of others, provide the “ammunition” that will pass the valid and credible challenges to be expected from CAI and other lawyers, provided the arguments do not get bogged down in irrelevant arguments from the opposition.

CAI cannot handle a broad Bill of Rights challenge. Period! I have never been challenged by CAI because they well know that they are defending the defenseless.

Read the book, paperback or eBook, and spread the word. Use it in those many HOA violations where state statutes support the HOA. Work to hold seminars and conferences to openly discuss the issues raised in The HOA-Land Nation. Expose their defense of HOAs, now!

Notes

[1] Wayne Hyatt was a prominent figure in the promotion of HOA-Land as well as an important person in creating CAI in 1973, serving as its second president.

^[2] I have extensively quoted Wayne Hyatt’s 1976 statement on HOAs as mini-governments, as cited in the 1983 California case, Cohen v. Kite Hill.

[3] I have concluded that there exists an HOA-Land Nation within America that is comprised of fragmented and local HOA governments across the country and have designated them collectively as “HOA-Land.” The commonality of their declarations of CC&Rs, flowing from the 1964 Homes Association Handbook (ULI publication), their shared beliefs, values, traditions, and institutions qualify HOA-Land as a nation.

[4] David Cole, National Legal Director of the ACLU, Engines of Liberty, Basic Books (2016).

HOA golf clubs, property values, and increasing financial liability of homeowners

According to the Desert Sun, the question of the relevance of golf clubs in maintaining property values in an HOA was brought before the California courts.[1] A number of homeowners in Rancho Mirage, CA are challenging fees imposed on them to support a golf club that they rejected joining when they bought their homes. The HOA justifies its fees, saying that the golf club helps to maintain property values and home resale prices.

One homeowner was quoted, “Now, no homeowner can be sure about their financial future . . . . You build your economic plan on a certain set of assumptions, and one of those assumptions is, I’m going to be treated fairly.”

“The HOA board argues that a well-maintained club is critical to maintaining the community’s high property values. Club president described the course as ‘the community’s backyard,’ suggesting that although homeowners might not play golf, they benefit from the club’s success.”

The Associa property manager argues that homeowners don’t understand that the biggest part of their home’s value is the golf club, which they have very little control over. The board, in fulfilling is obligations, can either enforce mandatory club membership or raise fees.

The HOA president believes that there is an “inherent flaw in the design.” In my view, it’s not the only one. Many of the “flaws” are buried and hidden within the governing documents and not brought to the attention of prospective buyers.[2] What is needed to protect and warn buyers, since CAI and others have been insisting as of late that HOAs are business or investments, is a true “red herring” document (“red herrings” is the popular term applied because of the proliferation of bold, capitalized red lettering).

The HOA mandatory state PUD disclosure documents are laughable and come nowhere close to protecting HOA home buyers as do the federal (SEC) stock purchase disclosure documents (red herrings). The mandatory SEC document contains bold lettering and lettering in capitols to highlight important issues. It warns the buyer, among other things, that buying the stock is high risk and that past performance is no indicator of future performance. And there are detailed charts and tables that disclose all that is determined to be material to the decision to buy.

As you well know, this format and none of this detailed disclosure is required by any state mandatory HOA PUD document. For example,

there is no warning that the buyer is actually pledging his home as security for the survival of the HOA, or a golf club;
or that his home and its financial obligations are in the hands of, for all intents and purposes, complete strangers;
or, as in this instance, that his financial obligations can extend beyond his home as decided by the board and stranger-members against his will;
or that the state does not get involved, treating any disputes as a purely private matter;
or that contract law does not apply, including the unenforceability of “agreements to agree.”[3]

And the HOA is not even a public entity with constitutional protections for the homeowner!

BUYER BEWARE!

References

[1] “Tension rising as golf clubs, HOAs look to future,” Rosalie Murphy, The Desert Sun, Dec. 28, 2015

(http://www.desertsun.com/story/money/real-estate/2015/12/28/rancho-mirage-morningside-hoa/77045734/).

[2] See in general, HOA Common Sense: rejecting private government.”

[3] Setting aside the question of a valid contractual agreement, “agreements to agree” deals with contract uncertainty where decisions are to be made in the future. The law requires certainty in contracts. Does a validly passed CC&Rs amendment constitute an agreement to agree due to the uncertainty of the amendment content? (Now you must pay golf fees like it or not.) Does a buyer’s consent to be governed by the CC&Rs amendment provision, which does not restrict amendment content satisfy the certainty test for a valid future agreement? In the public domain there would not be any question as we are dealing with municipality law and doctrine, not contract law. However, HOAs are subject to contract law, not municipality law and that makes a huge difference.