Tag: law

The continuing saga to quash HOA due process protections by the State of Arizona

 

On Feb. 11, 2009 my attempt to intervene in the Arizona Meritt superior court appeal of an DBFLS petition was denied. The Meritt complaint was based solely on the superior court decision in Waugaman, as no argument occurred in the Meritt default decision. I was required to file an Answer in defense of the statute to the HOA complaint that sought a declaration of unconstitutional adjudication of HOA disputes by DFBLS.

 

This denial was a surprising event given that Meritt was a default decision on a question of the constitutionality of a statute, and I had introduced the Attorney General’s brief in support of constitutionality from Waugaman in my Answer. In Waugaman, the AG’s brief was given a single line in the decision, a decision that quoted the HOA’s argument: “the Attorney General’s office fails to identify a single way in which the [Department] actually exerts regulatory authority over planned communities.” The focus was solely on whether or not the AG’s brief satisfactorily addressed the one issue of concern to the court, and to the HOA: the extent of regulatory authority. (For a clarification of the roles played by these cases, see my earlier comments on the Gelb petition at Will AZ Supreme Court do justice for 1 million HOA members? )

 

Filing as a Pro Per, this knowledgeable layman argued, among other things,

 

Here [HOA adjudication] there is a direct statutory adjudication authority and there is no need to divine legislative intent and tie it to an agency’s regulatory mission. The decision regarding constitutionality must therefore fall to the Bennett or four-fold test used in both Hancock and Cactus Wren. There is nothing in the Bennett test that considers proper regulatory authority per se. The requirement for adjudication as ancillary to proper regulatory authority is not a requirement of the Bennett four-fold test . . . . (¶ 10, p. 5).

 

In view of the facts in Hancock contained in paragraph 10, this fixation on regulatory authority is misplaced in view of the direct statutory authority to adjudicate contractual disputes in both the Act and planned communities. (¶ 11, p. 7).

 

This essential argument finding error with the Waugaman decision’s focus on the extent of regulatory authority (used as sole authority in Meritt, and essentially repeated in the Gelb appeal) is more elegantly presented in part 3 of the Nov. 30, 2010 Gelb Petition, “III. A.R.S. § 41-2198 is a Constitutional Delegation of Authority to An Administrative Agency and Does Not Violate the Separation of Powers Doctrine.” (p. 11). Gelb argued,

 

The Court of Appeals incorrectly determined § 41-2198(3) violated Article 3 of the Arizona Constitution because there was “no nexus between the regulatory authority or purpose of the DFBLS and the authority to regulate planned communities.” . . . Significantly, the word “nexus” does not appear in either decision. Nor does either case require “a nexus between the primary regulatory purpose of the [agency] and the adjudicatory authority granted in the Administrative Process” as stated in the Court of Appeals opinion.

 

Furthermore, in undertaking this analysis of the constitutional delegation of powers to an agency, the Gelb appellate court stated, “In applying these factors, we are mindful that duly enacted laws are entitled to a strong presumption of constitutionality and any doubts should be resolved in favor of upholding a statute against constitutional challenges.” Additional Petition arguments cited authority in support of a blending of functions, and agency adjudication as assisting the judiciary rather than usurping its powers as held in the Gelb opinion. These arguments attacked the court’s conclusion that the HOA had overcome “this strong presumption of constitutionality” of a statute.

 

Let us hope that the Arizona Supreme Court will hear this Petition and do justice on behalf of the people, an estimated 1 million plus Arizonans living in HOAs and condos.

HOA disputes: judicial activism with a political agenda

Our judicial system rebounds with mottos, slogans, quotes end even chiselings on building facades attesting to the goal of “justice for all” or “equal justice under the law.” But we must ask whether justice was served in the Arizona ruling in Gelb v. DFBLS[1] that struck down an independent tribunal’s adjudication of HOA disputes?  We must ask:  Was the ruling judicial activism in support of a political agenda?

In the underlying Hancock case, the court held,

 The separation of powers doctrine does not forbid all blending of powers, but only is intended to keep one branch of government from exercising the whole power on another branch . . . Courts today also recognize that absolute independence of the branches of government and complete separation of powers is impracticable. . . .We also believe public policy favors such a blending of powers here.

With the above understanding, we must ask how the Gelb court arrived at its opinion that,  “In accordance with well-established legal authority, the HOA has overcome the presumption of constitutionality . . . “

 Read the full Commentary at HOA judicial activism.

 

HOA due process protections: Arizona OAH vs. NV Ombudsman

 

The HOA statistics provided by the Nevada Ombudsman Report for 2010 stands in sharp contrast to the success of the terminated Arizona OAH adjudication of HOA disputes.  It shows 55% of the HOA complaints were resolved, while the Intervention Affidavit (complaint) Report reveals that a mere 4.5% had gone on to an ALJ for adjudication. The Ombudsman Report also shows that of the indicated 1,260 complaints, only 25% made it to a conference hearing, of which 55% were resolved. In total, about 14% of the complaints were resolved. (It should be noted that the number of complaints indicated on the two reports reveal a marked discrepancy of 1,260 on one and 493, or 512, on the other).

 

Some people would point to these numbers and say, “See, we told you so. HOAs are 95% good, but we do have these malcontents and disgruntled people.” Others would say that the Ombudsman office operates like State Bars where very few complaints make it to a judicial hearing, and only after being screened by their brethren.

 

Other states with an ombudsman office haven’t fared any better. In California, the Ombudsman can be vaguely discerned through the bureaucratic mist, while in Florida the outspoken homeowner rights advocate group, CyberCitzens for Justice, repeatedly criticizes the handling, or lack of handling, by Florida’s DBPR “ombudsman” agency. Both have been in existence for over four years.

 

In Arizona, after a brief 2 plus years, its agency that handled HOA disputes by means of the independent Office of Administrative Hearings (OAH) was declared unconstitutional[1]. In contrast to the reported Nevada 4.5% heard by an ALJ, just about 80% of the complaints were heard by an ALJ at Arizona’s OAH. In contrast to these other large states, an ALJ at OAH heard some 66 cases of which 42% were won, for the vast majority, by the Pro Per homeowner against the HOA and its attorney.

 

No wonder the CAI member law firm made repeated attempts to silence OAH[2], and after 3 shots at the apple it won in Gelb v. DFBLS, CA-CV 09-0744 (Ariz. App. Div. 1, Oct. 28, 2010). The well documented OAH adjudication had revealed the stark reality of HOA abuse, and the denial of the equal protection of the law under the corrupt HOA hearing process where the accusers judged the accused. (To say, as some have, that the homeowner openly and with full knowledge accepted this condition is incredulous!) In the two years prior to the passing of the bill granting DFBLS/OAH power to adjudicate HOA disputes, the Arizona Legislature had failed to pass bills that would ease the burden on homeowners going before the Justice of the Peace courts. It rationale was that it would create an uncertain burden on the JP courts because of a potential tidal wave outcry for justice.

 

The adjudication of HOA disputes by the Office of Administrative Hearings in Arizona was a landmark advance in due process protections for homeowners and should be adopted in all other states. It’s powers were limited and the parties had rights to appeal to the civil courts. It did not usurp the role of the judiciary nor violate the separation of powers doctrine, but assisted the civil courts by providing justice within reasonable costs for the individual homeowner. Case law contains many rulings that such benefits and purposes do not violate the separation of powers doctrine, and many such instances exist today. (It should be noted that all OAH petitions were brought by the homeowner).

 

The Arizona Legislature cannot pick and choose what portions of the Constitution it wishes to enforce and which it wishes to ignore. In order for it to acquire obedience in conscience from the people, its legitimacy rests on valid and just laws. Due process protections for HOA residents must be restored by means of an “acceptable to the courts” revision of the applicable statutes.

Notes

1. 
Independent tribunal adjudication of HOA disputes in AZ held unconstitutional.

2.  The State of Arizona will not protect buyers of HOA homes!

HOA taking of property rights can be a constitutional violation

This Florida appellate case, Duvall v. Fair Lane Acres, Inci, has important ramifications for the loss of property rights that are taken away by private entity homeowners associations. The court held that, “These property rights are constitutionally protected, and the trial court erred in ordering the Homeowners to sign the [association] Agreement by which they would be required to surrender these rights.” Here, a voluntary association — that under the declaration was required to provide certain services to all lot owners — attempted to impose additional requirements on and the withdrawal of services from non-members. Fair Lane sought to compel membership by such actions. It even drafted a new declaration and sought, rightfully, the consent of all the lot owners. The Plaintiffs did not consent.

 

With respect to property rights, it is very important to understand that in this instance there was no agreement or covenant that all owners were mandatory members of a homeowners association. Also, the declaration’s explicit covenants were upheld with respect to stated services, and non-stated obligations had to be consented to by each individual lot owner. With bona fide HOAs, the courts have imposed the broad, open-ended “agreement to agree” covenant, pertaining to amending the declaration by majority vote, applicable to those not consenting. By such rulings, in my view, the courts have violated the long standing property rights of lot owners, placing servitudes law above constitutional law. The application of these court rulings, a rejection of equal justice for all and the constitutional prohibition of ex post facto laws, render the declaration at the time of purchase meaningless.

 

Understanding the above, and speaking of homeowners associations, look to your declaration to determine what was explicitly granted to the HOA or obliged to by the lot owner. And that includes any valid amendment to the declaration, if any. All too often the HOA has taken broad liberties and the courts have treated the HOA as if it had the attributes of public government, and ignored the declaration and the owner’s protected property rights. The Duvall court held,

 

The most valuable aspect of the ownership of property is the right to use it. Any infringement on the owner’s full and free use of privately owned property, whether the result of physical limitations or governmentally enacted restrictions, is a direct limitation on, and diminution of, the value of the property and the value of its ownership and accordingly triggers constitutional protections. Snyder v. Bd. of Cnty. Comm’rs, 595 So.2d 65 (1991).

 

To impose a limitation on who can use and enjoy property is a direct restriction on the Homeowners’ ownership rights in their properties. . . . Similarly, to restrict the ability to transfer property by imposing an obligation to seek the approval of the Association is an improper infringement on the Homeowners’ property rights.ii



Putting aside the legal doctrine that homeowners have fully consented to everything and all things done by the HOA, the taking of a homeowner’s property rights by private organizations should be raised in all challenges where the HOA exceeded the rights granted to it by the CC&Rs or state laws.

i   Duvall v. Fair Lane Acres, Inc, No. 2D09-5089 (Fla. 2nd Dist. App., Dec. 1, 2010).

ii  See in general, Ethical obligations of attorneys to HOA members (HOA attorneys supporting transfer fees on sellers).

A legitimate and valid government: obedience in conscience

 

In 2004 I wrote about The Legitimacy of HOA Governance, quoting the writings of constitutional scholar Randy Barnett:i

 

A constitution that lacks adequate procedures to ensure the justice of valid laws is illegitimate even if it was consented to by a majority . . . constitutional legitimacy can even be seen as a product of procedural assurances that legal commands are not unjust”. . . .”A law may be ‘valid’ because it was produced in accordance with all the procedures required by a particular lawmaking system, but be ‘illegitimate’ because these procedures were inadequate to provide assurances that a law is just.

 

Barnett speaks of justice by explaining, “the founders’ view that ‘first come rights, and then comes the Constitution’. The rights that precede the formation of government they call ‘natural rights’ … For these are rights that the people possess before they form a government and therefore retain; they are not positive rights created by government.”

Natural rights define a private domain within which persons may do as they please, provided their conduct does not encroach upon the rightful domain of others. As long as their actions remain within the rightful domain, other persons — including persons calling themselves government officials — should not interfere without a compelling justification.”

And, more directly relating to HOAs where homeowners are assumed to have given their unanimous consent to be governed by the HOA, Barnett wrote,

If there are some rights that cannot be waived or transferred even by the consent of the right-holders, then the unanimous consent regimes [including HOAs], to be legitimate, must offer procedural assurances that these inalienable rights have been protected.

In other words, these inalienable rights are independent of any form of government and that a legitimate government cannot take away or restricted. And this is why I cannot over emphasize the important of arguments based on fundamental principles of American government in our efforts to obtain justice. And this is our biggest problem in fighting HOA governance and its legitimacy over homeowners. This bypasses the important question of contractual consent.

These attitudes and beliefs on the legitimacy of laws and government, and the people’s obligation to obey in good conscience, are not new. They can be found dating back some 260 years in Emmerich de Vallet’s, The Law of Nations.i Exchanging the word “nation” with “homeowners association” would not affect the content of this treatise, except in areas pertaining to the objectives and goals of the HOA society — set forth in its declaration — as compared to a democratic constitution where the primary concern is the people and not the state.

Vattel wrote, “If the greater part of a free people . . are weary of liberty, and resolved to submit to the authority of a monarch,—those citizens . . . though obliged to suffer the majority to do as they please,—are under no obligation at all to submit to the new government . . . . “ (P. 48). In contrast to the HOA constitution, which by its very nature repudiates a democratic government of the people, by the people, for the people, democratic government’s primary concern is to provide for justice. “This obligation flows from the object proposed by uniting in civil society, and from the social compact itself.” Our own Preamble lists “establish justice” first among its objectives. And Vattel cautions, as advocates today ardently have repeatedly sought redress, “The best laws are useless, if they be not observed” and that “a penal sanction becomes necessary, to give the laws their full efficacy.”

In April of this year I wrote The legitimacy of HOA boards and state legislatures , continuing to quote the views of Barnett,

That [the homeowners’] acquiescence to obey these unjust [HOA] laws and covenants cannot be misconstrued and interpreted as having  consented in good conscience to have agreed with the laws or with the HOA’s governing documents.  

 

The vast majority of these HOA and condo statutes and “acts” do not measure up to qualify as legitimate laws.  Our public government, realizing that it cannot achieve a voluntary acceptance and willingness by homeowners to obey these laws in conscience,  must resort to repressive and punitive laws as found in any other dictatorship or banana republic, even those with a facade that the people have a right to vote.  These unjust laws mimic the private government “constitutions”, the governing documents of these planned communities, with their authoritarian HOA governments.

In our recent past, we have witnessed the Rule of Law drifting off into oblivion with increasing encroachments by the short-sighted Rule of Man. By Man who has been preoccupied and narrowly focused on his own personal agenda of “what’s in it for me”, his political legacy, his allegiance first and foremost to the objectives and dogmatic principles of his political party rather to the good of the country and his fellow man.

America has lost its direction and the reason for its being. It is a necessity at this time for all to recapture those reasons for being and to re-establish their rightful position in guiding the actions and decisions of our elected representatives. Only We the People can restore the lost America of our origins. And those who defend the HOA legal scheme, for whatever their perceived benefits, have chosen to accept an authoritarian regime and to have denied and renounced our democratic system of government.

As stated in the Law of Nations, the people who disagree with the majority’s preference for a democratic government, and who have a right to disagree and who prefer HOA governance — who find democratic laws as illegitimate to which they cannot be bound in good conscience — are the ones who should pick up and move, not the majority who still prefer democratic government: “they may quit a society which seems to have dissolved itself in order to unite again under another form: they have a right to retire elsewhere, to sell their lands, and take with them all their effects.” To the bewilderment of many Americans, in our New America, this renunciation of and succession from American constitutional government is acceptable to all our branches of government: executive, judiciary, and legislative.

notes

i  Randy Barnett, Restoring the Lost Constitution: The Presumption of Liberty (Princeton Univ. Press 2004).

ii The Law of Nations or, principles of the law of nature, applied to the conduct and affairs of nations and sovereigns, Emmerich de Vattel, 1758, (Joseph Chitty, ed., 1883), http://www.constitution.org/vattel/vattel-01.htm.