government – Page 12 – HOA Constitutional Government

Local government copies HOA government

In the June 23, 2012 NY Times article by David Segal, “A Georgia Town Takes the People’s Business Private,” Segal asks and answers, “What is local government for? For years, one answer, at least implicitly, was ‘to provide steady jobs with good wages.’” It reduces public government to just providing for the maintenance of the community, following the lead of the other form of local government, the private HOA regime whose purpose is to just “maintain property values.”

While the answer is in keeping with the theme of the article regarding the privatization of government services, it ignores the unique functions that distinguish a public government entity from a business, or more importantly, a membership nonprofit business. Just what are those unique functions?

Are governments just a business? Are businesses just a government? Are HOAs just a business? Are HOAs just a local government? In his April 2, 2008 CAI Ungated blog entry, CEO Skiba writes: “Community associations are not governments . . . . Yet they are clearly democratic in their operations.” Skiba continues further with, “The solution to that problem is not to replace democracy with tyranny, royalty, or some other form of government, but to work to make the democratic process better and to hold those elected accountable. . . .” He seems to be pleading that whatever aspect of democracy there is in HOAs, we must make serious improvements. Note his use of “some other form government” is an admission that HOAs are political governments.

I find it hard to accept the above assertion by Skiba that CAI supports making HOAs more democratic. Rather, CAI supports the top-down imposition of UCIOA laws that blatantly contradict its other pronouncements that HOAs are the town hall ideal of democratic governance. And it contradicts CAI’s documented positions before the courts and state legislatures opposing constitutional protections for homeowners in HOAs.

Political scientists (among them Wayne Hyatt, Evan McKenzie, and Steven Siegel) have accepted a compromise position that HOAs are a sui generis entity, a unique combination of business and public government functions that require a new set of laws to establish a just and fair governance of people living in an HOA controlled community. Yet, since Siegel’s seminal paper of 1998 (Wm & Mary Bill of Rights Jnl), the laws remain pro-HOA without HOA accountability to the state, and without the equal protection of laws that apply to all other citizens except those living under HOA regimes.

A detailed discussion of the de facto status of HOAs as state actor governments can be found in The Foundations of Homeowners Associations and the New America, “Part III, American Political Governments.”

Traitors and turncoats: HOA directors as CAI members

In every state HOA directors have a fiduciary duty to the HOA, to act in good faith, and as a prudent person would (as he would spend his own money). Why then, are HOA directors also CAI members? CAI is a vendor, a business trade organization formed to support the business interests of its members, mainly attorneys and managers. To say that the vendors and the consumers share the same goals is to question the speaker’s mental state.

It’s understandable for consumers to seek assistance from vendors, as happens in many different industries, but to join and support a vendor organization? The usual procedure is for the vendors to become associate or affiliate members of the consumer organization, which in our case would be an HOA organization. (Those HOA associations of associations, like ECHO in California and SCOHA in Arizona, are just fronts for a CAI controlled entity.)

How and why did this occur? It began at the very start with the initial 1974 composition of CAI that had HOAs as a member category, although not quite explicitly stated. Each of the 5 categories was to be equally represented in governing CAI: 1) builders and developers, 2) homeowner leaders of associations, 3) association managers, 4) public officials, and 5) other vendors.[i] At that time, CAI was a 501(c)3 educational organization and not a trade group. But this changed in the period of 1989 – 1993.

At the 1989 CAI retreat, controversy emerged on just who CAI represented given the fact that HOAs were consumers, not vendors. According to the CAI “historian” Donald R. Stabile, “One participant commented that the CAI . . . builder and developer group viewed CAI as a consumer organization teaching consumers how to sue the builders” to which another responded, “CAI is a professional organization and not a consumer group; that it was never intended to be a consumer group”. [ii]

Stabile continues discussing this important turnabout period in CAI history when it felt the need to become a business trade group, yet still retain the homeowners as members. In regard to homebuyers and residents, “To be sure, getting them interested in CAs [HOAS] was an important element in enhancing the popularity of this new form of housing” [read, mass marketing of HOAs]; and, “The advice they [the buyers] received from CAI was consistent with what [CAI developers and managers] needed consumers to be hearing”.[iii]

As to the thoughts of the 1973 Founders of CAI at this juncture, Stabile adds that they “deemed it important for attaining legitimacy for the CAI as a voice for the entire industry” [iv] and to relate “positive aspects to the public especially regarding public policy issues”.[v] (They have since dropped that line). Concern centered that a “more consumer-oriented organization” would supplant CAI, and that “other citizens’ associations, which were consumer motivated, might become the national representative.” [vi]

It seems that the roots of a great con started in that 1993 period that altered the purpose and mission of CAI, when lobbying for their members predominated under the guise of promoting vibrant and harmonious communities. In 2005, some 13 years later, CAI finally dropped the façade of representing HOAs – HOAs were no longer members. All through this period CAI, and many of its attorney members, had addressed legislatures saying that they represented homeowners and HOAs. And still today this claim appears quite frequently in CAI public statements.

What we have today is the faithful follower Team Players and the dogmatic True Believers (see The HOA Privatization Scale) simply denying reality like the Emperor in the fairytale, The Emperor’s New Clothes.[vii] When a little boy cried, “He has no clothes,” the Emperor realized that he had been duped. Yet, he continued to believe in his delusion since he could not admit having being wronged by con men.

For whom does the HOA director – CAI member serve? Isn’t this an outright conflict of interest? Does he serve as a “patriot” for the HOA, under legal requirements and dictates? Or, for the CAI business trade group as a “turncoat” to his HOA? HOA members must reject board memberships in CAI that are paid for by member assessments. These directors/officers are traitors, turncoats, and fifth columnists, all believing that they are doing good for the HOA.

Further reading:

For a detailed, non-CAI history of HOAs and CAI, see The Foundations of Homeowners Associations and the New America.

Notes

[i] Community Associations: The Emergence and Acceptance of a Quiet Innovation in Housing, Donald R. Stabile, (Greenwood Press 2000) p. 117.

[ii] Id, p. 129. (CAI became a 501(c)6 business trade group in 1992).

[iii] Id, p. 133.

[iv] Id.

[v] Id, p.131.

[vi] Id., p. 129.

[vii] The Emperor’s New Clothes, Mindfully.org (http://www.mindfully.org/Reform/Emperors-New-Clothes.htm), June 7, 2012.

Exchange with Ward Luca on HOA legitimacy and legislative reforms

New comment on Ward Lucas & The HOA Hell Blog

See complete exchange at Homeowners Claim HOA President Abuses Power

pvtgov:

What homeowners don’t realize is that they are at the mercy of total strangers who are their neighbors in an HOA. In order to make the HOA concept work, and to make them appealable to the masses, HOA officers and boards were given a free pass. No checks and balances and no state imposed meaningful […]

Ward Lucas:

Nobody in the world crystallizes the problem better than you do, George. With Las Vegas totally collapsing, what plan would you submit to the Governor or Legislature there, and what plan would work with every state? And do you believe, as I do, that the entire national HOA structure is corrupt?

HOA member Declaration of US and State citizenship

I am proposing that the following be urged as a bill in your state, which requires a mandatory statement of HOA member citizenship. (Revised August 1, 2015).

Declaration of US and State citizenship

With the understanding that the association, as a private entity and not a subdivision of the state, and as a de facto but unrecognized private government, is not subject to the restrictions and prohibitions of the Fourteenth Amendment to the US Constitution that otherwise protects the rights of the people against actions by public government entities;

and that the governing documents in all legal practicality serve as the subdivision’s constitution, taking precedence over state laws and over the state and US Constitutions unless specifically denied by any such laws or legal precedence;

Therefore, the members of the association, having not waived or surrendered their rights, freedoms, privileges and immunities as citizens of the United States under Section 1 of the Fourteenth Amendment, and as citizens of the state within which they reside, the CC&Rs or Declaration for any planned community, condominium association or homeowners association shall state that, or be amended to comply,

The association hereby waivers and surrenders any rights or claims it may have under law and herewith unconditionally and irrevocably agrees 1) to be bound by the US and State Constitutions, and laws of the State within which it is located, as if it were a subdivision of the state and a local public government entity, and 2) that constitutional law shall prevail as the supreme law of the land including over conflicting laws and legal doctrines of equitable servitudes.

Furthermore, any governing documents of an association not in compliance with the above shall be deemed amended to be in compliance, and notwithstanding the provisions of any law to the contrary, a homeowners’ association shall be deemed to have amended its governing documents to be in compliance.

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