Tag: justice

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 Privatization Scale: facing reality

Note:  As you read this commentary, please keep in mind the serious revelations of wrong-doing in HOA-Land: in Nevada, in California with corrupt judges, in Arizona where the case files on charges against an HOA attorney for aiding and abetting have been sealed, and in those states with consumer “pacifier” ombudsmen who accomplish very little.   Many will blame the government, and ignore the role played by the HOA member in allowing such activities to happen with such ease.  The Privatization Scale shows an attitude that can be described as an irrational fear of, “Don’t make waves otherwise the government will take my HOA away.”

 HOA Privatization Scale

  Having spent a few years in this arena of homeowner associations, I’ve come up with a scale to help define where a person stands on the status and acceptance of HOAs.  This is based on the attitudes and statements made by the person and will be helpful in understanding and communicating with him.

I chose a scale based on the degree of privatization that is acceptable to the HOA member; that is, how strongly does the person identify and accept the level of privatization in one’s life and home and the intrusion into one’s privacy by HOA boards. There are 5 classifications:

 1.      REVOLUTIONARY – This person sees HOAs as an anomaly to the American way of life and beliefs, and operating outside the laws of the land.  The HOA model must be completely revised or removed.

 2.      REFORMER— This person generally accepts the HOA legal model and powers of the HOA as granted by the CC&Rs, and permitted by the state governments. He only wants the board to change its ways to conform to his views.  He’s primarily concerned about his own local problem.

 3.      COMPLACENT — He is the person who is content with his HOA, only seeing “personal” aspects of the HOA’s powers and functions; that is, the HOA keeps the community neat and clean, provides amenities, etc. This person does not understand the broader issues surrounding HOAs.  There are no problems with the board, just those homeowners who don’t comply.  The board does a good job.

 4.      TEAM PLAYER — This person understands the private nature of the HOA, but prefers it and the sanctions against members.  He primarily is concerned about the quality and value of his community.  A believer in private clubs and their restrictions, and a person’s right to associate with whom he pleases. He does not let violations of fundamental principles and laws affect him.

5.      TRUE BELIEVER — This person is a power player who understands that the HOA private organization structure, with the lack of government enforcement against HOA board violators, offers an opportunity to control and to dominate. Enforcement is necessary to protect property values. What’s good for him is good for the community. Most horror stories can be found here.

 The graph shows a normal distribution curve and the percentages of the people within each segment.  As can be seen, I have shifted the Complacent category to the left. It signifies a preference by HOA members in favor of acceptance of the HOA legal concept, beyond an unbiased expectation.  That is, all things being equal, as I’ve tried to accomplish with the scale, category 3 should fall in the center of the graph.

 In the normal course of things, those at the extremes, the Revolutionaries and True Believers, are the most proactive and vocal segments, but not in equal strengths of being active.  The right-side has been more vocal and influential.

 From my many years of direct involvement in the HOA reform movement and my research and study into social and political reform movements, the environment and conditions necessary for substantive reforms to occur are not even on the horizon.  Token reforms will occur here and here, and some have brought substantive changes like the OAH adjudication of HOA disputes in Arizona, and the prohibition on foreclosing just for HOA fines.  Sadly, though, many substantive reform bills have been repeatedly rejected by state legislatures.

 As long as reformer-advocates continue to accept the legitimacy of the HOA legal scheme — not wrongful or unlawful — they have rejected their most powerful weapon in their battle to achieve substantive reforms.  And in doing so, they have allowed their very powerful oppressors to sit as equals at the bargaining table.  The outcome is, and can only be, as expected and as demonstrated historically. 

  

ASSERT YOUR RIGHTS AS A CITIZEN

REJECT THE HOA CONSTITUTION

 Send the HOA Member Declaration of Citizenship to your legislators!

Allegations filed against AZ HOA attorneys in sealed case

Of the 66 General Allegations in the court appointed Receiver suit against the HOA’s former attorney, CAI  and CCAL members  Maxwell and  Morgan, I have prepared a list of  13 allegations that I consider representative of the allegations.   On behalf of the  public and its constitutional right to know, they are listed because the court completely sealed the records in DC Lot Owners v. Maxwell & Morgan, CV 2010-004684, Pinal County Superior Court, AZ, so that an online  public inquiry results in a “not found.” 

I have not been notified by the court of any such order to close the records, nor was I permitted to see a copy of the order to seal the records.  Such failure to provide a notice and reason for closing court records violates the Arizona Supreme Court Rule 123(d): “Upon closing any record the court shall state the reason for the action, including a reference to the statute, case, rule or administrative order relied upon.”

Understand that an allegation is a claim of wrongdoing by a  party to be proven in court.  I am sure many readers will identify with similar activities by other attorneys that have occurred in their HOA.

To understand these allegations, some clarifications are in order:

  •          “Majority Owners” is a group of owners who took control of the HOA.
  •          “Braslawsce” refers to the underlying law suit that resulted in the appointment of the Receiver, who is bringing this suit against the HOA attorneys.

 

Read the selected allegations here.

 

See,  Arizona court protection of CAI member attorneys

Arizona court protection of CAI member attorneys

The Arizona case, DC Lot v. Maxwell & Morgan, against a CAI HOA attorney regarding some $650,000 in missing HOA funds is closed or sealed.  A court order is needed to unseal it. Even the court ordered closing and the reasons for its action are sealed. The public is being kept in the dark.  Why?  Now I can understand that maybe there are investigations or discoveries going on that certain parties shouldn’t know about, but this is a civil case, not criminal.

Remember, this is a case brought by the court appointed Receiver and not by just anybody else. The CAI attorney law firm of Maxwell & Morgan is being sued for aiding & abetting and disgorgement, among other things. Maxwell & Morgan are still practicing law. Maxwell has had a few sanctions against him. Why the secrecy?

The Arizona Capitol Times covered the underlying story in 2009, so there’s no secret anymore. The secret is the fact that a CAI member attorney is being sued for some serious wrongs. And if by some chance it is felt that open court records would diminish DC property values and that’s the justification for complete secrecy, something is rotten in Denmark and in Arizona.

Rule 123 of the Arizona Rules of the Supreme Court addresses the closing, “sealing,” of case records. R 123 allows the judge to seal it on his own, in the interest of the public, or upon motion of a party. What is the public interest being served here? Generally, the closing of a case, excluding the usual personal info like social security number, proprietary business data, etc., relates to juvenile and criminal proceedings.

R 123(c)(1) Open Records Policy. . . [T]he records in all courts . . . are presumed to be open to any member of the public . . . . However, in view of the countervailing interests of confidentiality, privacy or the best interests of the state public access to some court records may be restricted . . . . (My emphasis).

(d) Access to Case records. Upon closing any record the court shall state the reason for the action, including a reference to the statute, case, rule or administrative order relied upon.

It appears Rule 123(d) has been violated as there is no public record of the seal order. R 123(d) can’t mean that the reasons for closing records are to be kept secret, too, can it? Now, that would require extreme level of public protection, maybe national security level, to “erase” all the records, don’t you think? The case just “disappeared like smoke in the wind,” to quote colleague, and only because I had obtained the case number way back when has this fact come to light! What could justify a complete blackout?

It has similarities to another CAI member (Carpenter Hazlewood) case in which the Maricopa County superior court judged failed to give reasons for denying my motion to intervene (required so I could appeal the denial) in the OAH statute constitutionality case (Phoenix Townhouse v. AZ DFBLS), which was decided by default. And then all my submissions to the court were ordered stricken and the clerk was ordered not to accept any further materials from me. That material contained evidence that the “real person in interest” no longer existed as he no longer owned a lot in the HOA in question. Yet the decision was allowed to stand.

I am seeking assistance from concerned parties to help unseal these records, which smells of HOA attorney protection, and denying the people their right to public disclosure.

References

What happened to the AZ lawsuit against HOA attorney for aiding & abetting missing $650,000?

AZ Supreme Court accepts advocate’s amicus brief in challenge to HOA statute

Amicus

Dare oppose the Will of the HOA, you will pay for it!

Local Phoenix Ch. 3, azfamily.com, (HOA forecloses on Mesa homeowner) did an excellent job in bringing out what goes on in HOA-Land where HOAs are protected by public policy.   In this incident, a homeowner builds a wall for security, as she stated, and gets fined by the HOA.  In a default judgment for an injunction, the CAI HOA attorney obtained some $16,000 in fees for less than 9 months’ work.  This incident expanded to the HOA foreclosure for nonpayment of assessments.

In the foreclosure, a simple filing asking the judge to grant the sale — unlike other disputes over nonpayment of a debt, there are no justifiable excuses not to pay HOA dues — the HOA attorneys tacked on another $12,000 in fees, for a total of some $28,000 in fees.  The HOA got a total just $3,300, of which $1,700 were for unpaid assessments.

If this was in the public arena, and a fine was permitted, there would be no attorney fees paid.  If the state foreclosed for nonpayment of taxes, the equivalent of HOA-Land assessments, there would be no attorney fees.  But, the HOA attorneys are allowed to walk away with fees far in excess of the fines and unpaid “taxes.”  I call it legalized extortion.  

The extortion consists in knowing the homeowner does not have the funds or power to oppose the HOA, and the HOA is not punished under law for any wrong doing.  So the HOA sues, knowing that it has an  80% of getting a default decision, or the homeowner pays the money demanded.   Any different from banana republic justice?    The problem becomes out of control when the homeowner falsely, but innocently, believes  the HOA can’t do anything to him. He lets it go until sued for the typical amounts as involved in this incident.

The common pro-HOA, but  misleading, argument on the acceptance to be bound to the CC&Rs has no merit.  It  ignores the questions of fraud and misrepresentation when buying an HOA controlled home.    For example, is the buyer told that the “sacred” CC&Rs at his closing can be modified without his consent, making them a meaningless piece of paper?  That this ability means that his neighbors control what he still thinks is his private property?    Is the  buyer told that his house is collateral to the HOA, and he must pay no matter, even if  the HOA fails to perform or violates the CC&Rs; or that the CC&Rs are a binding contract whether or not he has signed or read them?  And what about the agent who makes the buyer sign the purchase contract and initial all the contract pages, but requires nothing equivalent from the buyer regarding that second, briefly mentioned in passing, CC&Rs contract?   Look up the definition of fraud and misrepresentation.

In the above AZFamily.com story, when  the homeowner appealed   the attorney fees, the judge approved them writing that, “The Court notes in passing that the short answer to defendant’s objection to the amount of attorneys’ fees is that they were caused by defendant’s intransigence.”  (Minute entry of 3/5/2012, CV 20120-12322).

“Intransigence” is a loaded word!   It denotes firmness and sticking to your guns, even stubborness.  What the judge has done here is to punish the homeowner for standing up for her rights and her home against the banana republic justice illustrated above.  Dare oppose the Will of the HOA and you will pay for it!   Big time!  And he rewards the attorney, without any discussion of the role the attorney played in the delays.  What about the 3 minute entries over 2 years that basically said, “nothing is happening for the past 150 days with the suit”, about which the attorney could have prevented by seeking a decision.  But that would cut his fees, wouldn’t it?  The unreasonable prolonging of law suits violates  R11(a) of civil procedure.

Is this the public policy of the State of Arizona?   Support the HOA and its attorney against the people of Arizona who have been misled about HOA-Land?  Four bills that would have held the HOA and its board accountable under penalty, and which would have provided for “clean HOA elections,” failed to become law this past session.