Tag: law

AZ bill, SB 1148, seeks to restore OAH adjudication of HOA disputes

The Arizona bill, SB 1148, seeks to overcome the objections of the appellate court in Gelb, and restore due process protections to homeowners in HOAs by means of OAH adjudication. (See Advocate submits amicus brief in AZ supreme court appeal of HOA due process).  Below is the explicit statement of intent for this legislation, of which one purpose is to  protect the consumer who buys a home in an HOA.

Sec. 4. Legislative findings and intent; department of fire, building and life safety; community disputes

It is the intent of the legislature to find, determine and clarify all of the following after careful consideration of the case Gelb v. Department of Fire, Building and Life Safety, 1 CA CV 09-0744, filed October 28, 2010 (Ct. App. 2010):

1. The department of fire, building and life safety has exercised substantial responsibility for many years in the enforcement and application of state laws and private contracts that regulate the relationships between those who reside in and those who control certain types of common housing, namely, mobile home park residential communities.

2. The legislature has determined that while the direct licensure of mobile home parks and their owners may not have been necessary, the regulation of their private, legal relationships with their tenants has been and continues to be an important consumer protection function of the department of fire, building and life safety and that department has developed considerable expertise in interpreting, enforcing and applying the statutes relating to these mobile home communities and in interpreting, applying and enforcing the terms of the leases, rules and other documents that regulate the relationship between the residents of the mobile home parks and the owners and managers of those parks, and doing so in a cost-effective manner for the residents.

3. The legislature further determines and finds that while direct licensure and regulation of condominiums and planned communities may not be necessary at this time, the legislature has repeatedly found over the years that owners in condominiums and planned communities are frequently subjected to inconsistent, unreasonable and often unlawful enforcement and application of the declarations, rules and bylaws that govern their communities, their managers and their boards of directors, and owners are often unable to afford the cost of formally litigating their disputes in the superior court.

4. The legislature further finds that the continuing use of the existing hearing officer function in the department of fire, building and life safety will provide for an efficient use of already-established common interest community expertise at this agency, will provide an important consumer protection for owners in condominiums and planned communities and will efficiently and effectively provide for resolution of these common interest community disputes without the expense, formality and difficulty of requiring a trial in the superior court in every instance, and will do so without the cost and bureaucratic complexity of creating an entirely new administrative body to perform these important functions, while still maintaining the ability and right to recourse in the superior court, and without threat to the core functions of the judiciary.

AZ bill reasserts state supremacy over HOAs

For several years at the Arizona Legislature bills with a very limited restatement, or reminder, that civil government controls public streets were proposed.  Each year they were defeated by the special interests —  read that to include the HOA boards acting as representatives not of the homeowners, but of the legal fictitious person, the HOA.

 
This year we see Arizona’s CAI LAC co-chair Scott Carpenter writing in his Arizona Legislative Session blog – surrounded by his firm’s advertising, links and buttons to pay fines, but speaking for himself, says he – about intrusions into the government of the independent HOA principalities.  He objects to Sen. Harper’s HB 2140, a bill to prohibit HOAs from denying homeowners their second amendment rights to carry arms, or more correctly, from prohibiting HOA interference with all those rights protected under Article II of the Arizona Constitution.  Article II is Arizona’s Declaration of Rights, the state’s version of the Bill of Rights, which all states have in one form or another.
 
Carpenter’s law firm had also fought to have the statutes providing for an independent tribunal to hear HOA disputes by DFBLS/OAH, which provided due process protections with fair and just hearings, declared in violation of the Arizona Constitution.  He now stands in opposition to and objects to the recourse to the Arizona Constitution to protect all the rights of homeowners.  Apparently he sees the Constitution as working solely on behalf of the HOA principality, but not for the homeowner— as it secedes from our constitution and from our system of democratic governance.  Welcome to the New America of HOA-Lands.
 
Carpenter continues his plunge into the secession from local government by HOAs, echoing as Robert H. Nelson discussed in Chapter 20, “Neighborhood Secession”, Private Neighborhoods: the transformation of local government (Urban Inst. Press 2005), while seeking the protection of the Arizona courts to enforce the HOA “constitution.”   (Interestingly, Private Neighborhoods references this writer’s 2000 statement to the Arizona Legislature on a Homeowners Bill of Rights, p. 102).  Carpenter cannot have it both ways!  He cannot deny constitutional protections for homeowners and then seek those protections for the HOA!   Such a position would be a repudiation of what this country stands for, and his oath to support the Constitution that he took when he was admitted to the State Bar:  “The Oath of Admission to the Bar:  I, (state your name), do solemnly swear that I will support the Constitution of the United States and the Constitution of the State of Arizona;”
  
What a sad state this country has come to when the legitimate political government of the state must reassert itself as the supreme law of the land.
 
Congratulations to Sen. Harper for this long awaited bill in support of the people.

AZ CAI attorney maintains that “the law cannot fix” abusive board problems

CAI lobbyist and LAC co-chair in Arizona, Scott Carpenter, made it quite clear in his 2011 Legislative Preview blog post, Jan. 11, 2011, that:  “Community associations function worst when the elected directors act out of self-interest, play favorites, and work for their own political purposes” (see, there are indeed serious  problems in HOA-Lands).  And then declares, “The law cannot fix this problem directly any better than the law is capable of fixing conflict in families or marriages.”  Let me repeat that:  “The law cannot fix this problem directly any better than the law is capable of fixing conflict in families or marriages.”  Has he ever read the Constitution, the Bill of Rights or the Declaration of Independence?
 
Sarah Palin, in her video on the Arizona shooting this past Saturday, made reference to the Founding Fathers understanding of man’s  imperfect nature.  She quoted James Madison (Federalist Papers #10), “If men were angels there would be no need for government.”  (See Constitutional Local Government website, http://pvtgov.org).  It was that awareness by the Founding Fathers that led to the adoption of checks and balances and of a separation of powers.  But when there is no accountability, no check on private HOA governments by state government, one can only assume that those who become directors are blessed with perfection in all that they do.  And that the wise and learned legislators have the exceptional ability to see these angelic persons, and find it only fair and just to leave HOA matters to the HOA board.  Perhaps this is the real reason for the hands-off policy of the legislature.
 
It should be noted, however,  that Carpenter, in an about face,  fails to mention his Dec. 17, 2010 letter to the CAI lobbyist, DeMenna, that it’s a good idea for  a law that gives a minority of members the power to alter your CC&R contract at the time of purchase – 2/3 of 50% quorum =  33.5% of all the members. HOAs are contractual and are not public governments.  If Carpenter wants the HOA to function like a public government with its election laws, his justification for this proposed change in law, then he should argue for the modification the CC&Rs contract by member vote and not by legislative fiat.  Apparently legislative interference is a swinging door, depending on which side of the fence Carpenter is on.  He now seeks legislative interference that he otherwise rejects.  (While Carpenter takes pains to inform the reader that he speaks for himself, not CAI and not for the firm, the letter is signed by Carpenter “for Carpenter, Hazlewood, Delgado & Wood, PLC.”  Nor does he mention the fact that he remains co-chair for Arizona Central CAI chapter as he writes.) 
 
Carpenter closes with a strong statement that control of the HOA belongs with the members and directors, in contradiction of his above proposed changes by legislative fiat.  What is quite clear is:  Carpenter is opposed to the democratic functioning by the people, the members alone, within the HOA subdivision, with no recourse to state oversight of its operations to protect you, the homeowner. He  is strongly opposed to accountability to the civil government by private governments functioning under  an authoritarian form of government.  In fact, his law firm, Jason E. Smith the attorney of record,  has trice opposed the delegation of  authority by the legislature to a state agency (DFBLS/HOA) to hear HOA disputes. (See, in general,  https://pvtgov.wordpress.com).  He appears to want HOAs to be treated as independent principalities.
 
Carpenter has made his position quite clear. He is opposed, like CAI Central, to constitutional protections for homeowners.  He seems to be arguing that HOAs are a special class of utopian government that require no oversight by the state.  And sadly, like many other political statements on the national level, there are those true believers who see no wrong because it would not sit well with their own personal agendas. Or, they are declaring their preference for dogmatic principles, like a misguided support for “individual rights,” which they interpret to mean, “we can do anything the majority wants with no constitutional constraints.”
 
This secession from constitutional government must stop!

Advocate submits amicus brief in AZ supreme court appeal of HOA due process

I submitted a motion requesting the court’s permission to file an amicus curiae brief in the AZ Supreme Court Gelb v. DFBLS appeal — the unconstitutionality of OAH adjudication of HOA disputes.  CV 10-0371-PR.  Under this option I did need the consent of both parties.  The court will decide on the fate of my amicus brief, and has yet to decide whether or not it will hear the Petition at all.
 
Here are some excerpts:
 
Staropoli provides this amicus curiae brief to assist the Court in understanding the broader political and social environment created by the lack of constitutional protections for citizens seeking justice from private government HOAs. . . . . There are no consumer protection warnings and notices such as “truth in lending” and “truth in advertising.”  The Attorney General’s office  refuses to act on homeowner complaints . . . . The Real Estate Dept. (ADRE) has failed to enforce its Commissioner’s Rule . . . A.A.C. R4-28-1101(B), Duties to Client . . . .  All of which raise serious issues of consent with full knowledge of life within the HOA regime.
 
.  .  .  . 
 
The issues before this Court are serious questions of the adjudication of HOA disputes by an independent tribunal in a “leveled” hearing process that permits the confrontation and questioning of witnesses and the presentation of evidence. The DFBLS procedure requires, as with a civil action, a statement of violation of law that is not currently required under the HOA “notice of a hearing and the opportunity to be heard” mockery of justice procedure, a procedure that encourages an “unconstitutional” taking of private property by private corporate entities.
 
For the foregoing reasons, the Court has no alternative but to reverse the appellate court opinion and quash the Phoenix injunction against hearing HOA disputes by DFBLS. If indeed the other branches of government are of the opinion that the statutes in question are unconstitutional, then they, and especially the only branch with the power to do so, the Legislature, can easily undertake a repeal of the alleged undesirable statutes. But, they choose to remain silent under the “unspoken alliance”. This Court must act in the name of the people.

HOA Case History: state actors or mini/quasi government

  1. Cohen v. Kite Hill,142 Cal App 3d 642 (1983) (A homeowners association board is in effect “a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government.”)
  2. Gerber v. Long Boat Harbour, 757 F Supp. 1339 (M.D. Fla. 1991) (court enforcement of private agreements in condo declarations is a state action; flag; free speech).
  3. Hudgens v. NLRB 424 US 507 (1976) (functions of a municipality, citing Marsh; shopping center)
  4. Marsh V. Alabama, 326 US 501 (1946) (company town and public functions)
  5. Shelly v. Kraemer 334 US 1 (prohibitive state actions by use of judicial enforcement as state was fully aware of the illegal use of the courts; judicial enforcement harms constitutional rights)
  6. Williamson v. Lee Optical, 348 US 483, (1954) (rational basis for scrutiny)
  7. Damon v. Ocean Hills Journalism Club,  85 Cal. App. 4th 468; (2000) (quasi-government; board meetings public forums similar to government body;defamation)
  8. Laguna Publishing Co. v. Golden Rain Found. of Laguna Hills, 131 Cal. App. 3d 182 (1982) (HOA has attributes that “in many ways approximate a municipality . . . close to a characterization as a company town.”)
  9. Surfside 84 v. Mullen Ct. of Special Appeals of Maryland, No. 495 (September 1984) (state action; procedural due process; lack of notice; CAI Reporter).
  10. Brock v. Watergate 502 So. 2d 1380 (Fla. 4 Dist. App. (1987)( public functiuons test; close nexus criteria; HOA lacks character of a company town)
  11. Committee for a Better Twin Rivers v. Twin Rivers, 929 A.2d 1060 (NJ 2007) (HOA not state actor per NJ Scmidt version of Marsh; Not US but NJ Const. case).
  12. Indian Lake v. Director of Revenue, 813 SW 2d 305 (not civic organization)
  13. Midlake v. Cappuccio, 673 A 2d 340, Pa. Super. (1996) (condo is a pvt organization, not muni govt; not a company town)
  14. Riley v. Stoves, 526 P.2d 747, Ariz. App. Div. 2 (1974) (state action; classification; enforce age restrictions;”court to enforce constitutional commands”; restriction was a permissible government interest).
  15.  S.O.C. v. Mirage Casino-Hotel, 43 P 3rd 243 (Nev. 2001) (state action; public functions; delegating functions to private persons; commericial advertising on private property).
  16. Terre Du Lac Ass'n, Inc. v. Terre Du Lac, Inc., 737 S.W.2d 206 (Mo. App. 1987). (quasi govt) (how a homeowner's association operates as a "quasi-governmental entity," not authority for the concept that an association's "quasi-governmental" actions are state actions;).
  17. Westphal v. Lake Lotawana, 95 SW 3d 144 (Mo. App. 2003) (no support for “close nexus” state action).

Note:

  1. The above cases in bold are color coded. Red is adverse to constitutional protections; Blue is favorable; black in neutral.
  2. There are 3 case against and 4 cases in favor. Two were not dispositive. The “against” cases were all based on a “public functions” test.
  3. The non-bold cases concern related issues not involving an HOA/condo, such as state action, public functions, or mini/quasi governments.

  4. The above findings are not exhaustive and reflect the analysis of some 153 HOA/condo , state action cases on a federal and state level.