law – Page 19 – HOA Constitutional Government

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.

Insurer denies HOA coverage in Trayvon death

This position by the insurer points out that the HOA board is NOT 100% protected for wrongful acts. Especially for those that are grossly negligent or intentional acts.

Homeowners should step outside the HOA attorney greated box that implies that the HOA can do no wrong, and remember that laws other than those HOA or Condo Acts also apply to HOAs: Restatement of Servitudes, tort law, and corporation law.

From the COURTHOUSE NEWS SERVICE Aug. 6, 2012

ORLANDO (CN) – Traveler’s Insurance sued Trayvon Martin’s mother and The Retreat at Twin Lakes Homeowners’ Association, where her son was killed, claiming it has no responsibility to defend the HOA or cover the teenager’s death.

Travelers Casualty and Surety Company of America sued The Retreat at Twin Lakes Homeowners’ Association and Sybrina Fulton, as representative of her son’s estate, in Federal Court.

The Retreat at Twin Lakes’ Neighborhood Watch captain George Zimmerman shot Trayvon Martin to death on Feb. 26. The shooting set off a national furor, as police initially let Martin’s killer, George Zimmerman, go free after questioning him. Martin was black; Zimmerman is not.

Travelers claims that on March 30, it issued the HOA a “claims-made, nonprofit management and organization liability insurance policy.

Fulton then sought monetary damages against the HOA’s policy with Travelers for her son’s death.

Travelers claims it is not liable because of the policy’s “wrongful act” exclusion.

Travelers claims the exclusion states:

“‘The insurer shall not liable to make any payment for loss in connection with any claim made against any of its insureds: 1) based upon, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving bodily injury, sickness, mental anguish, emotional distress, disease or death of a person, provided that this exclusion shall not apply to allegations of mental anguish or emotional distress if an only to the extent that such allegations are made as part of a claim for wrongful employment practices.’

“Travelers is in doubt of its rights under the policy and, by this petition, seeks a declaration of its rights and obligations with respect to the claim and demand made by Fulton upon Travelers and The Retreat at Twin Lakes as a result of the fatal shooting or Martin, and a finding by the court that under the above-referenced policy of insurance Travelers has no duty to indemnify or defend The Retreat at Twin Lakes in connection with the Fulton claim because coverage is precluded by the above exclusion.”

Zimmerman was rereleased on $1 million bond in August his first bond of $150,000 was revoked.

State Judge Kenneth Lester ordered Zimmerman back to jail after finding that Zimmerman and his wife Shellie misled the court about how much money they had.

Shellie Zimmerman was arrested and charged with perjury days later, and released on a $1,000 bond. She was to be arraigned July 31 but her attorney Kelly Sims filed a written not guilty plea.

George Zimmerman has pleaded not guilty to second-degree murder and claimed self-defense under Florida’s so-called “stand your ground law.”

Judge Lester last week refused to recuse himself after Zimmerman’s attorney Mark O’Mara asked him to. O’Mara accused Lest of making “gratuitous, disparaging remarks” when he set Zimmerman’s second bond, according to wire reports. Lester denied the motion as “legally insufficient.”

Insurer Says It Should Not Have to Pay for Trayvon Martin’s Death

Beware the folly of eliminating supermajority voting for amending the HOA CC&Rs

The latest drive by pro-HOA attorneys and lobbyists has been to seek legislation to do away with supermajority amendments to the CC&Rs. If approved, the very foundation of majority rule in a democracy, and our long standing requirement that fundamental documents must have supermajority voting in order to be amended, would be destroyed. The argument is, Gee, because of the apathy, we can’t make important amendments to the CC&R.

In the 2011 Arizona legislative session, HB 2441 was defeated at the last moment. It would have allowed for minority – as low as 1/3 of the members — to amend the CC&Rs. The CAI lobbyists fought hard for this bill, even telling the committee that although it was governmental intrusion, the legislature always did that.

Think for a moment. If a minority can control the amendment process, it can control the HOA by enacting amendments that further strengthen the powers of the incumbent board. Given the fact that the rogue boards are dominated by their HOA attorneys, minority control solidifies the political machines as the power elite.

Think about it! Under a political machine minority vote regime, the regime can eliminate all and every need for member approval, except, of course, voting for directors. And, all future amendments will have this acceptable ground for the amendment — the apathy of the membership demands minority control. Nobody cares, so what!

However, in spite of this persuasive argument, the infinite wisdom of the California legislature shines brightly when it enacted laws in the Davis-Stirling act permitting just such amendments as valid. Section 1356 addresses minority control of an HOA. This section 1356 is an oxymoron and is an unreasonable and illogical intrusion on the private contract and to our fundamental belief in majority rule in a democracy.

Section 1356 allows for less than supermajorities where the governing documents require more to amend the governing documents. So a 60% voting requirement would allow for minority control. There is no restriction in the law on the lower limit for approval except to appeal to the judge that “this ain’t right.” In other words, like the failed Arizona bill, 1/3 can be acceptable, and even a 20% requirement would be acceptable.

The lunacy of this law is that a majority voted amendment to reduce supermajority voting requirement is valid, if approved by a judge. Go figure! The law has circumvented the CC&Rs private contract putting the cart before the horse! That the members have spoken is the basis for this requirement, in spite of evidence of psychological indoctrination to obey and legal pressures of financial harm for not obeying. (See Why do people harm others in HOAs?)

But if a supermajority was needed, as currently required by the CC&Rs, the amendment to amend before the court would fail. I mean, isn’t that why the HOA is before the court? They can’t get anything done with a supermajority!

How to get a supermajority vote? It’s done every day, everywhere. The content and need for the amendment must be conveyed to the membership in an open forum, an open meeting, and be debated before the membership. And not in some one-on-one private meetings or phone calls.

There is no requirement in the law to hold an open meeting of the membership to debate the amendment before approving the elimination of supermajority voting. A requirement that is found in all legislative and state agency rule-making procedures – public input.

In the recent court opinion (Quail Lakes Owners Assn. v. Kozina (2012) 204 Cal.App.4th 1132), the homeowner does not challenge the validity of this law, but advances procedural arguments under the law. That was a big mistake (he lost), as I’ve repeated argued, of not seeing the ugly forest through the trees. The mandatory requirement under § 1356(c)(5), that “the amendment is reasonable” was never argued as I’ve argued above. In fact, my arguments above were made loudly and clearly in defeating Arizona’s HB2144, and that defeat went to the very last vote.

This decision is another example of bad law becoming a detrimental precedent against homeowners. If you think you have problems now, wait until your HOA blindly obeys the board and allows for a minority controlled HOA.

This work by George K. Staropoli is licensed
under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
Attribution must be made to George K. Staropoli as author.

Media still sees HOAs only in monetary terms

My comments to the investigative reporter from KTHR.TV in Indianapolis, IN.

I congratulate you on your very detailed report on what HOAs are all about (13 Investigates: HOAs). Your article joins the newly emerging HOA Enlightenment Movement that looks beyond the special interest, national lobbying trade entity, CAI, propaganda. For more detailed info on HOAs, beyond my short comments, please visit my links below.

Take maintaining property values covenant, the very basis of the pro HOA argument. Show me where the CC&Rs warrant or guarantee property values? Don’t look too hard as you will not find any. In short, the buyer gives up his rights and freedoms, offers his home as collateral for the survival of the HOA, and agrees to pay the assessments no matter what, even if there’s a dispute with the HOA, for an empty promise. Some deal!

In general

The HOA legal scheme is seriously defective in regard protecting people who are citizens of their state and the US, but who are now under a private regime not accountable to the state. The CC&Rs “contract” is based on equitable servitudes and not constitutional or contract law, making these de facto HOAs independent principalities. But, you only see the money side of HOAs that can be viewed as a con job.

For example, the HOA is very much like a closely held business with restricted exit opportunities, and where the members are jointly and severally liable for the debts of the HOA – if a member can’t pay, his “share” can come from the other members’ pockets. Did you know that? Wasn’t that explained to you?

Did you know that the buyer does not have to even read the CC&RS to be held to the binding agreement? All that is necessary is to file the CC&Rs with the county clerk’s office and the buyer is bound by simply accepting his deed, sight unseen and unsigned. Why isn’t the buyer told before he signs the purchase contract? Isn’t this misrepresentation?

Let’s jump to “Steps to Take Now.”

In general, although Indiana has a very limited HOA statutes, the CC&RS are an adhesion contract — take it or leave it in favor of the HOA – that contain provisions that a municipal government could not impose on its citizens. And don’t forget the misrepresentation mentioned above when you hear arguments that “they agreed to and signed” the contract.

See The Truth in HOAs Disclosure Agreement.

Your discussion of “Homeowner Rights” is woefully deficient!

You speak only of the “laws” of the HOA and its CC&RS “constitution.” Do you really believe that the buyers willingly and openly agreed to waive and surrender explicitly stated and implied rights when they took their deed? In a manner that would pass judicial scrutiny? For example, “fines” and the “notice of a hearing” as commonly found in the top-down CC&Rs mock the Constitution. And, the absence of fair elections protections makes political machines a reality.

See the Declare your US and State Citizenship for the legislature.

I hope you will make a serious effort to read these materials, backed by evidence, court decisions, statutes and the statements made by the pro-HOA special interests. And publish your review and summary.

What makes a good HOA lawyer?

A good lawyer is highly skilled in creating doubt and confusion through the use of semantic deconstruction. By “deconstruction” I mean analyzing, dissecting and fragmenting the sentence grammatically to isolate individual words or phrases and to explore alternative definitions. The poster child example was demonstrated by Pres. Clinton: “It depends on what the meaning of is, is.”

Other specific, well known examples are from the judiciary itself, where in the Kelo decision the court redefined “public use,” as found in the 5^th Amendment, to mean “public purpose”; and in the Citizens United decision equating a corporation to a real person with rights to contribute to election campaigns.

A good way to understand this tactic is the forest and trees analogy. The HOA attorneys ignore the description of the forest (the common meaning of the sentence statement) and attempt to redefine the individual trees that make up the forest (the words and phrases used in the sentence). By redefining the descriptions of the trees, the attorneys create doubt and an alternative interpretation in their favor. And by doing so, they have redefined the forest to mean something else other than what was obviously intended. The statement, as commonly accepted, now has several alternative meanings.

My favorite example is CAI’s insistence that HOAs are not governments but businesses. CAI makes use of the archaic Marsh v. Alabama public functions test that reduces the long held legal doctrine of a government (the sentence) to a test of a few factors (the trees). Does the HOA possess the functions of a government? Well, the question can be reversed to ask: Does a government possess the functions of a business? This approach gets us nowhere. The “trees” have become the focus, the substitute legal meaning, of deciding the definition of what a government is, and the traditional legal doctrine is summarily dismissed as irrelevant. It is a defect in our system of jurisprudence.

If you attempt to find the meaning of a vague concept in the dictionary by pursuing the words used to define it, say the word “government,” you quickly find yourself in a circular rut. Justice Potter encountered this difficulty in Jacobellis v. Ohio (1964) when he wrote that the Supreme Court “was faced with the task of trying to define what may be indefinable,” referring to the difficulty of defining the broad concept of what is pornography. He admits to not being able to intelligently define pornography, “But I know it when I see it.”

This sums up the reality of attempting to define concepts that are well understood in our society, but escape a unique and distinguishing definition. Only by specifying examples that distinguish between what is and what is not can a society clearly arrive at an acceptable definition.

These “word games,” as I call them, this one shot redefinition of long held concepts (the court seeks some means to decide an issue and picks one, almost arbitrarily), is very dangerous and undermines a stable society. It, along with “political correctness,” is Newspeak (from Orwell’s 1984) where a person can no longer make meaningful distinctions about reality, and where black can mean white.

Good lawyer play these word games very skillfully, and the judges follow along with redefinitions to suit the particular issue before them, rather than re-examining the whole concept that is in question. Opposing lawyers for homeowner rights advocates must not lose sight of the broader picture, the forest.