Tag: law

HOA homebuyers MUST have a competent lawyer before they buy

 

Not only must prospective buyers of homeowner association controlled homes retain a competent lawyer, if one can be found who will represent the buyer, but must also understand the fact that covenants are being constantly interpreted by the courts.  That means whatever you or your attorney think you’ve agreed to, assuming unlike today the buyer doesn’t even have to see the CC&Rs in order to be bound by them, the court may give any entirely different spin on the meaning of the covenant. 

That’s called making new law.  And that’s on top of existing legal precedent heavily in support of HOA governments, and against the privileges and immunities to which we all are supposed to be entitled.  To a very good extent, buyers of HOA homes are getting “a pig in the poke.”

When further considering the argument, like CAI and HOA promoters like to argue, that buying a home is buying an investment, this HOA investment is a very bad deal for an investor.  Recall that even the common law authority on servitudes (covenants)[i] recommends that in the event of a conflict between servitude law and constitutional law, servitude law should prevail.  There goes any vestige of any rights still retained by a homeowner.

In a recent example of “surprise” by the Wyoming Supreme Court[ii], owners who sued their HOA for imposing unreasonable requirements on modifications to their home, and won on that issue, were still denied their breach of contract claim.  Now follow carefully.  The trial court accepted the claim of unreasonableness and stopped there, not addressing the other claim of breach of contract and payment of attorney fees.  The supreme court took the position,

 While we have often explained that restrictive covenants are contractual in nature . . . that does not necessarily mean that a homeowner is entitled to recover contract damages against a homeowners association. Ms. Dwan has not identified any provision of her CCRs that would allow her to claim damages against the Association. She has not provided any legal authority, from Wyoming or any other jurisdiction, supporting her claim for damages.[iii]

The court distinguished between equitable relief  — this ain’t right — from a contract with its explicit wording and absence of wording, which doesn’t have to be equitable.  The board can act unreasonably, but they are not punished for doing so.  (Contrast this with the right to punish the homeowner with fines, which is granted to the HOA under both the CC&Rs and almost every state HOA statutory Act).  Once again, the developer’s  “take it or leave it” contract does not protect against board actions by providing a penalty as a detriment against any such further actions. Once again, where wrong-doing was found against the HOA, the CC&Rs adhesion contract favors the HOA with its silence on damages in the event the homeowner does win a lawsuit.  

   Notes

[i] Restatement Third, Property: Servitudes, § 3.1, comment h.

[ii] Dwan v. Indian Springs Ranch HOA, No. S-09-0064, (WY June 3, 2010).

[iii] Id.

Calif. finds HOA suit against opposition signs to be SLAPP

Some sense is finally being displayed by Cal. courts in support of the Constitution against the second local,  de facto  governments — HOAs.   Homeowners require protection to speak out, since HOA issues can be public issues.  Many states have an anti-SLAPP statutes.  

A SLAPP suit (strategic lawsuit against public participation) is a lawsuit brought primarily to chill a party’s constitutional right of petition or free speech. The anti-SLAPP statute was enacted to prevent and deter lawsuits that chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances and provides “an efficient procedural mechanism to obtain an early and inexpensive dismissal of nonmeritorious claims” arising from the exercise of those constitutional rights. (Martinez v. Metabolife Intern., Inc. (2003) 113 Cal.App.4th 181, 186.)

Section 425.16, subdivision (b)(1), states: “A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”

The Signs Are Speech Protected by the First Amendment

The Signs Are Not Defamatory

The Signs are in a Public Forum and Concern a Matter of Public Interest

No Probability of Success on the Merits Nuisance

Slander of Title.  The Beach Club asserts that it has stated a cause of action for slander of title because the signs disparage and impair the marketability of its property.

 
HOLDING:  Beach Club action was SLAPP.

SANTA BARBARA BEACH CLUB, LLC, v. FREEMAN, No. B212972 (Cal. App. 2 Div. May 3, 2010).  

http://www.leagle.com/unsecure/page.htm?shortname=incaco20100503008

Letter to NC House Select HOA Committee

 

Dear Committee members:

I am providing a copy of an email from a NC homeowner that exhibits her frustration and inability to deal in a fair and equitable manner with her HOA board.  If you believe that homeowners openly and freely agreed to be subjected to this type of treatment by de facto private governments, then I have a bridge in Brooklyn that I’d like to sell you.  Homeowners need to be protected like any other segment of the people from abuse by any group or organization. To say that a homeowner can go to court for a redress of grievances, would be like saying that there was nothing wrong with the 1950s Poll Tax abomination, used as an effective, legal at the time, devise to stop voter registrations.

 Please see my earlier post to concerned parties pertaining to recent NC Supreme Court decisions regarding HOAs.

Please restore constitutional protections for homeowners, along with the respect and dignity that they deserve, and provide penalties against abusive boards for violating NC laws.

 Respectfully,

George K. Staropoli

Pres.

Citizens for Constitutional Local Government

Arizona Attorney General will not prosecute for HOA justice

In response to a homeowners complaint, the AG’s office, Consumer Protection and Advocacy Section, replied,

Unfortunately, the problem you complained about is not within our jurisdiction.  Our office enforces the Consumer Fraud Act, however, the Act does not allow our office to pursue private disputes. Our office represents the state of Arizona and cannot act as a private attorney for individual citizens.

 

Understand that under the legalities here, the AG’s authority to deal with fraud is limited to “consumer fraud”.  Carefully reading the AG’s authority on its website[i], I found that fraud is defined solely in terms of the “selling or advertising“, which precludes its involvement in many of the HOA offenses and abuse.  Fraud, itself, is basically defined in terms of misrepresentation and false statements.[ii]  Consequently, homeowners must look elsewhere within the Attorney General’s Office for possible assistance. 

The Criminal Division[iii] has authority to  “protect the citizens of Arizona by successfully investigating and aggressively and fairly prosecuting criminal cases within the State of Arizona.”  Its Criminal Prosecutions Section contains the Fraud and Public Corruption unit, which “prosecutes white collar crime and fraud by individuals . . ..”  (Nothing further is mentioned of white-collar crime on the AG’s website). Note the distinction between “white collar crime” and “fraud”.  White-collar crime, as stated by the Gillespie Law firm, is a broad label, 

White-collar crimes typically refer to a type of financial, corporate, or economic crime often committed by employees or professionals using deception, as opposed to violent crimes that involve force. Most people who think of white-collar crime think of stock market and business fraud cases. However, white-collar crime involves a wide variety of criminal offenses.[iv]

 

Gillespie then lists the following as white-collar crimes:

1.      Bribery A.R.S. §§ 13-2601, et. seq. 

2.      Embezzlement, Theft, and Larceny A.R.S. § 13-1802 

3.      Extortion A.R.S. § 13-1804.  “Extortion” is a type of theft involving taking property or services through the use of a threat.  A person commits extortion when they knowingly 1) obtain or try to obtain something by threatening to: Cause damage to property, 2) Expose a secret that will subject anyone to hatred, contempt, or ridicule, or to impair their credit or business, or 3) Cause anyone to part with any property.

4.      Fraud Schemes A.R.S. § 13-2310[v].  A person commits a “fraudulent scheme” if, through the use of a scheme, they knowingly obtain any benefit by using false pretenses, representations, promises, or materials omissions.

In order to get the Attorney General to take your case, you need to file a complaint according to the above, with  evidence that can be taken to court.[vi]  Will he take your case?  In spite of the fact that he’s running for Governor, based on his prior unwillingness to defend homeowners against HOA abuse, and his failure to defend the OAH adjudication of HOA disputes, not very likely.  The AG has the discretion to declare, and will most likely do so, declare your complaint a private matter, a tort — a civil, not criminal wrong.[vii]  And asked if his office is to do justice, unlike the Dept. of Justice, he will probably say, no, it is to defend the state government. 

The AG will once again say  (paraphrasing), “Go ye unto the legislature, the sovereign of the state, and seek redress of your grievances.”   We must reply, “Will you come forward and support our cause against HOA abuse and injustice?”  And we must remind him that, “In every stage of these oppressions we have petitioned for redress in the most humble terms: our repeated petitions have been answered only by repeated injury.” [viii]

 Notes

[i] http://www.azag.gov/consumer

[ii] “A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment“, Black’s Law Dictionary.

[iii] http://www.azag.gov/criminal

[iv] ARIZONA THEFT / WHITE COLLAR CRIME, The Gillespie Law firm; the law firm is a criminal defense firm  (http://www.craiggillespie.com /theft.html).

[v] “Any person who, pursuant to a scheme or artifice to defraud, knowingly obtains any benefit by means of false or fraudulent pretenses, representations, promises or material omissions is guilty of a class 2 felony.”

[vi] “Fraud must be proved by showing that the defendant’s actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.” The Free Legal Dictionary,  (http://legal-dictionary.thefreedictionary.com/fraud). 

[vii] Viewing HOA injustice as a civil matter sets public policy against the homeowner in that the state is not interested in violations of the law with respect to HOAs. In general, a crime is an offense against society, whereas a tort is a civil wrong against a person. See Tort Law for Legal Assistants, Edwards & Edwards, eds. p. 6 (Thomson 2004).

[viii] Declaration of Independence.

Arizona's new "Take That George!" law: officials don't have to defend HOA statutes

This law was introduced, I firmly believe, as a result of my repeated chastising of our elected officials, over the past year, for their failure of to defend the constitutionality of the statutes that permitted the Office of Administrative Hearings (OAH) to adjudicate homeowner association disputes.  I take it as a feeling of guilt that this bill was introduced.

The adjudication of HOA complaints by OAH had leveled the playing field somewhat, providing attainable —”affordable”, to use a term used to defend the state’s protection of HOAs — justice, where the homeowner could go before an independent tribunal, without a lawyer and without the need to know the 100 odd rules of civil procedure contained in some 200 pages of “legalize.”  The constitutionality of the statute was not defended by the Attorney General, or by the legislative leadership, resulting in a superior court disgraceful default decision. A homeowner has no place to go, not even to the OAH where he could once hope to have found justice.  In the short history of OAH, pro per homeowners won 42% of their petitions against their HOA and its attorney.

This total disregard of my letter follows a flat denial, without explanation, of my February 11, 2009 Motion to Intervene, which was an abuse of discretion by Judge McMurdie.  Perhaps it was because I had included the Attorney General’s defense of the constitutionality of the statute in a prior case which would have caused a trial and an embarrassment to the AG), LC2007-00598 (Waugaman), given that the AG and Legislature now failed to defend the statute in this case. (See The State of Arizona will not protect buyers of HOA homes!, Feb. 29, 2009).

Ariz. Sess. L., Ch 105 (2010).
HB 2774 addition:

ARS 12-1841

D. THIS SECTION SHALL NOT BE CONSTRUED TO COMPEL THE ATTORNEY GENERAL, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES OR THE PRESIDENT OF THE SENATE TO INTERVENE AS A PARTY IN ANY PROCEEDING OR TO PERMIT THEM TO BE NAMED AS DEFENDANTS IN A PROCEEDING. THE ATTORNEY GENERAL, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES OR THE PRESIDENT OF THE SENATE, IN THE PARTY’S DISCRETION, MAY INTERVENE AS A PARTY, MAY FILE BRIEFS IN THE MATTER OR MAY CHOOSE NOT TO PARTICIPATE IN A PROCEEDING THAT IS SUBJECT TO THE NOTICE REQUIREMENTS OF THIS SECTION.