Tag: legislature

HOA Common Sense, No. 5: Democratic elections

Democratic elections, No. 5

HOA members have been repeatedly told that they can change things in their HOA by voting for board members and even by changing the governing documents; that HOAs are democratic because members can vote to make these changes happen.  Well, does that make real sense when we know that countries like China and Cuba allow their people to vote? Yes, the people are allowed to vote, but no one would think to call these countries democratic.  Use your common sense!  You are being conned!

HOA members should read my discussion of the California case holding the HOA to have violated the law on fair elections procedures in Wittenberg v. Beachwalk HOA.[i] Such activities as only containing the board’s view of candidates, continuing holding elections until the board wins, and not allowing equal access for ‘town hall’ meetings by members.

Why is it that this country would participate in seeing that fair elections take place in other countries, but do nothing for the 23% of the American population living in HOAs?  While a few states like California have detailed statutes dealing with HOA elections, most do not have an oversight entity watching the elections as undertaken with these foreign country’s elections.  Worst of all, generally it is the HOA attorney or HOA manager who tally and report on the voting, but both cannot be seen as independent observers or neutral parties.  They are both agents of the HOA and not the membership.  That is like having a business’ attorney overseeing union elections.

Furthermore, the defenses of voting the bums out and changing the governing documents are without merit. These defenses reflect the erroneous implicit attitude  that HOAs are the same as public entities.  They are not!  The HOA’s “constitution and laws” are contained in an agreement between a single member and the HOA.  To say that “you”, a single member, can change governing documents or vote the bums out misstates the law and the single member’s ability or right to accomplish this goal.  The member needs the assistance, the cooperation and votes of other members in order to accomplish these changes. 

Without fair elections procedures that contain enforcement against HOA board wrongful acts, including retaliatory acts and intimidation by the board, voting in an HOA is a mockery of democracy.  Is this HOA government better than public government?  Common sense tells us no!

HOA Common Sense, No. 4: Consent to be governed

Consent to be governed, No. 4

When pro-HOA supporters are pushed to justify the conditions of living in an HOA they usually end up with: “you agreed to the contract,” “if you don’t like it move out,” or “remaining in the HOA means acceptance to be governed.”   Here I will show that these defenses lack merit.

First, the application of contract law to the CC&Rs agreement reveals the many invalid aspects of the CC&Rs as a bona fide contract.  It is obvious from a simple review of contract law.  Yet, courts have held that the CC&Rs are a contract or are to be interpreted as a contract, and have even analyzed the meanings of CC&Rs in the same manner as a contract. But, the courts do not question the validity of the CC&RS contract with respect to contract law.  The courts resort to equitable servitudes law, which simply requires the acceptance of a deed in order to bind the home buyer to the CC&Rs sight unseen.

This apples and oranges approach doesn’t make sense, does it?  Unless, of course, the motivation is to coerce acceptance of the HOA legal scheme by violating the Constitution’s requirement for “the equal protection of the laws” for all citizens. A common sense approach for a just and fair contract says that this is all wrong; that applying servitudes law to coerce private government acceptance makes a mockery of the Constitution.

Second, for illustrative purposes, let us look at current events in regard to Obamacare, where the people are discovering what was said in support of Obamacare is turning out to be not so true.  That certain claims were misrepresentations and half-truths, which were obviously made to induce acceptance of Obamacare.  However noble the ends of Obamacare the means to achieve it are deplorable. However noble the ends served by the bill that Arizona Representative Michelle Ugenti may have believed the deliberate violation of the Arizona Constitution was not an acceptable means.

This is the same scenario that was played out in the mass merchandising of HOAs by the stakeholders, including state legislatures. This scenario holds that the beneficial ends served by HOAs justify the false and misleading means to obtain acceptance.  A society that accepts such conduct is dysfunctional and does not build a better community, but destroys it.  Think about it!

If indeed HOAs are the next best thing to Mom’s apple pie, wouldn’t it be sensible for the proponents of HOAs to put the matter to a test. Where is the full disclosure, as contained in the “Truth in HOAs Disclosure,”[i] of material facts for example, regarding HOA regimes?  If there is true consent by home buyers, why is CAI afraid to conduct this poll or state legislatures to draft legislation that requires such a disclosure?  Common sense tells us that this is the just and ethical thing to do, unless there is something to hide.

Third, rather than proceed as suggested above, the faithful HOA defenders have resorted to the mantras (I use this term to indicate unsupported and irrational dogmatic statements) such as “move out” and “HOAs are not for everybody.”  The argument that remaining in the HOA amounts to consent to be governed is without merit.[ii]  Aside from the ethical questions presented by this argument, it ignores the charges of fraud and misrepresentation to induce home buyers to accept the HOA agreement. It ignores the failure to pass judicial scrutiny[iii] for the waiver or surrender of constitutional rights. In other words, the HOA comes with unclean hands, which greatly weakens the legitimacy of its position to demand consent and that to remain in the HOA is full consent to all that the HOA does. 

For example, where’s the common sense to expect obedience to the rules and regulations when no notice has been provided of what constitutes a violation?  Unlike in the public arena where all violations of the law are made public (publicized in code books, online, etc.), not having knowledge of the law is no defense for a lawbreaker.

I find it hard to believe that the vast majority of HOA members fully consented to be treated as second class citizens resulting from the lack of Constitutional protections that they were told, since childhood, are guaranteed to all Americans.  I find it hard to believe that most members did not have a reasonable expectation that the state would not protect them and not provide meaningful enforcement against HOA board lawbreakers, or to believe that ex post facto amendments were valid, or to believe that the HOA would engage in a wide range of questionable activities under its grant of broad powers.

But this is what the pro-HOA special interests want you to believe!  That the good people of America seek unequal status, and prefer it (all those CAI surveys).   This is a disparaging and belittling attitude toward the good people of America, isn’t it?  It is an insult!

Obedience in conscience to a government requires fair and just laws. In fact, the legitimacy of a government is based upon promulgating fair and just laws.[iv]  It is the fundamental basis of the social contract between the people and the government.  And it is common sense to expect the same from private HOA governments.

Homeowners in HOAs must demand equal status with non-HOA homeowners and demand that the government justify why there should be unequal treatment and the loss of their rights, freedoms, and privileges and immunities under the Constitution.  Homeowners in HOAs must demand justifications that will meet and pass judicial scrutiny.

 

References

[ii] See Contracts, the Constitution and consent to be governed that addresses public government, yet applies to HOAs.

[iii] The Supreme Court has set tests for the constitutionality of legislation depending on the nature of the rights being violated. The most demanding is a necessary and compelling justification for the law, and that no other alternative is available, to a simple demonstration that the law serves a genuine government interest.

[iv] Prof. Randy Barnett wrote; “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”. (Restoring the Lost Constitution, Princeton Univ. Press, 2004).

The influence of HOA special interests on an AZ legislator — SB 1454

First-termer idealism and the awakening

Michelle Ugenti arrived at the Arizona Legislature in 2011 riding in as a Clean Election Candidate, meaning she took no special interest money.  On her web page she quotes from the Arizona Constitution, “All political power is inherent in the people, and governments . . . are established to protect and maintain individual rights.”

It appears from her comments about her first term that she ran right into the reality of how bills become laws:

The following two years [after being elected] have taught me what happens when ideas and principles meet head-on not just with competing beliefs but also with individual self-interest, whipped into a frenzy by forces armed with money and power. 

She’s talking about the special interest money and the influence it has on legislators.  Still, with a positive outlook facing her re-election in 2012 Ugenti writes on her web page, “I hope that my constituents find me faithful to . . .  preserving our rights and freedoms.”

But, something seems to have happened to Ugenti upon her re-election in 2012.  She seems to have found and adopted the way and the means to make a name and to advance herself in politics.  She talks of hard politics, of when to compromise and when to negotiate, and of being successful and effective.

It is precisely this delicate balance of knowing what to give and what to fight for that makes an effective legislator. I believe I am successful because I have the integrity and courage to examine each issue and stand wherever my conscience and conviction demand I stand.

The lure of the special interests

In 2013 we saw Ugenti’s tenacity to fight and stand by her conscience in regard to her HB 2371 HOA bill and incorporating this failed bill into SB 1454. It ran afoul of the Arizona Constitution and House Rules. She showed her conviction before the Senate GE committee hearing on HB 2371 and clearly demonstrated her newly found path to success as a legislator – by advancing the agenda of the HOA “stakeholders,” the special interests who make money from servicing HOAs.  And CAI is one leading “stakeholder.” (Stakeholders are not homeowners who are excluded from such meetings. And the legislators well know it.)

At that hearing Ugenti stated that each year there was “a plethora of personal HOA legislation” and tried “to spare the [committee] members the constant agony of many personal pieces of HOA legislation,” as contrasted to the industry legislation. She also said that she “felt very responsible to the stakeholders.”   That was in March. In July a lawsuit, Staropoli v. State of Arizona,  was filed against the State for an unconstitutional SB 1454. The Attorney General’s office and court agreed, removing Ugenti’s HOA provisions.

Yet, the Arizona Legislature sees no wrong in her conduct leading to the filing an amendment from the floor and refused to discipline her. Ugenti’s integrity and conviction is examined in SB 1454: Machiavelli at work in the AZ legislature – Part 1 and AZ House ‘circles the wagons’ in defense of pro-HOA legislator.

CAI stakeholder support of Ugenti

In October 2013, stakeholder and national HOA lobbyist CAI praised Ugenti for her efforts to advance HOA interests, as CAI sees them.  In an article in the Fall 2013 Community Resource magazine, AZ lobbyist DeMenna wrote, echoing Ugenti’s view that only  stakeholder legislation has any value:

“Under the leadership of Representative Michelle Ugenti . . . a working group was established to address HOA-related issues advanced by legitimate stakeholders. . . . and Representative Ugenti personally led the effort to ensure that only sensible and functional proposals were considered. CAl played a critical role in this process, although some compromises were required. . . . In the end . . . Representative Michelle Ugenti, is to be commended for her leadership in this area.

And in the AZ CAI chapter’s email, Notice to CAI Members **Very Important-Please read!**, Oct. 18, 2013, the AZ chapter wrote, again echoing Ugenti’s views,

Representative Ugenti . . . is instrumental in the development of HOA policymaking. Representative Ugenti’s stakeholder meetings, formed in effort to tackle the growing number of HOA bills introduced every session, are critical in defeating shortsighted proposals.

The email went on to announce a fundraiser for Ugenti:

Fundraising Reception in support of REPRESENTATIVE MICHELLE UGENTI.  Please make checks payable to: MichelleUgenit.com [sic].  If you are unable to attend, you can mail your contribution to CAI’s Arizona Lobbying Team: DeMenna & Associates. . . . Paid for by: www.MichelleUgenti.com.

The decline and fall of a legislator

What happened to Rep. Michelle Ugenti since her first term in 2011?  It appears she has serious issues of integrity and the demands of her conscience to fight for her beliefs. She has fallen away from those ideals and values of “preserving our rights and freedoms”; and that governments “are established to protect and maintain individual rights.” The  authoritarian, private HOA government has no legal obligations “to protect and maintain individual rights” as does our Constitution with its Bill of Rights.

Apparently, she has succumbed to “individual self-interest, whipped into a frenzy by forces armed with money and power.” Her conscience and convictions have led her to advancing special interest agendas and to crossing the line and violating the Arizona Constitution.  

Obstacles to effective HOA reform legislation

Jim Lane, a NC HOA reform activist and website owner of Alliance of Homeowners Associations and Owners, asked the following HOA reform questions on the LinkedIn HOA group:

What are the three biggest “issues” (be specific)? What is standing in the way of resolving them? What should Owners be doing? How?

A good understanding of the issues surrounding HOA reform legislation requires expanded answers to these questions.  There are too many dogmatic mantras being espoused that are not supported by any convincing evidence, like “move out, “no contract interference,” “you agreed to be bound,” etc.  I can only provide an outline of my answers to these questions.  A deeper understanding can come from a study and analysis of my Commentaries over the years since 2004. (A keyword search is available).

First question: Essentially, I have identified 5 fundamental areas that require substantive reform legislation; legislation, if enacted would produce a trickle-down effect on many of the more serious issues confronting homeowner rights, freedoms, privileges and immunities allegedly waived or surrendered by homeowners.

They are:

  1. HOA foreclosure (cruel and unusual punishment; suspect category)
  2. Lack of due process protections (eliminate HOA banana republic justice)
  3. No clean elections laws for HOAs (eliminate HOA banana republic elections)
  4. No penalties against HOA board violations (equal application of the laws; detriment serving as a check and balance on HOA board violations)
  5. Wrongful application of a valid consent to agree (misapplication of the domination of servitudes law over constitutional and contract laws to make the HOA legal scheme work)

A failure to attain these broad, fundamental reforms will leave homeowner advocates at the continued mercy and whims of their legislatures, who are all pro-HOA.

Second question:  The answer to this question will disturb many, many homeowners and HOA reform advocates.  First, the 40 year-old national lobbying organization, Community Associations Institute (CAI) has dominated state legislatures. CAI has advocated its personal agenda under the guise of making for a better America, and a fear mongering not to support reform advocates who will kill your HOA and cause a loss in your property values.[1]  And then there was the inappropriate mass merchandising of the defective HOA concept to generate profits for the HOA promoters.

Second, like the German people who allowed the Nazi party to gain control over the most cultural and scientific country at that time,[2] homeowners jumped at the carrots being offered by the mass merchandisers and ignored the stick of a decline in democratic institutions and constitutional protections.  Many believed that they were good people supporting what was good for the community and the state, just like the German people eagerly believed.

The denial of the reality of the HOA legal scheme is a common behavior when a person’s self- image is being destroyed or radically altered.  When one’s self-image serves as the basis of how that person sees himself to be, many owners accepting the reality of the HOA concept would be destroyed. Their reactions would be an outright denial to the point of irrationality.  To say that their cherished HOA is a wrongful legal concept that is not for the betterment of society is too say that they are wrongful people not working for the betterment of society.  And they will not accept that. They will not accept the fact that they, like the emperor in The Emperor’s New Clothes,[3] were conned so they will continue to ignore reality and live in denial.

We see this reaction when pro-HOA supporters are pushed to defend their positions and they cannot, so they react with, essentially, an I don’t care attitude.

Third and Fourth questions:  The homeowners must, themselves, face this reality and become enlightened.  They must unite and stop the continued influence of CAI on their legislature.[4]  The homeowners must become proactive to enlighten and change public opinion that HOAs are not the next best thing to Mom’s apple pie.

 

References

 

[1] There are existing laws in every state that would enable HOA to maintain their unique relevance to the subdivision in terms of private rules and amenities, etc., but would return HOA to our American system of government.  However, that would mean CAI would lose much of its dominance and influence over HOAs. See A proposal for the “Muni-zation” of HOAs; Stop developers from granting private government charters.

[3] The Emperor’s New Clothes, Mindfully.org (http://www.mindfully.org/Reform/Emperors-New-Clothes.htm), June 7, 2012.

AZ House ‘circles the wagons’ in defense of pro-HOA legislator

I feel that I must respond to the statements made by the Senior Republican Policy Advisor and House Ethics Committee Chair, apparent spoke persons for the House, who whitewash and defend Rep. Ugenti’s actions as just another day at the legislature.  The wagons are being circled.

Constitutionality

Their view is that, Filing an amendment from the floor that turns out to be declared unconstitutional is not a violation; it happens all the time.  Considering the very narrowly tailored definition of unethical acts – only those pertaining to money – it’s no wonder legislators are free to do as they please. Allow me to clarify this misleading view of life at the legislature.

In my 13 years following HOA legislation I’ve come to understand that many controversial bills can be subject to opposing interpretations.  One side may see a bill as not violating the constitution and the other sees it as violating the constitution.  Obviously, the sponsor acting in good faith sees the bill as constitutional and proceeds, hoping that it is not challenged at some point in time and found unconstitutional.  

The court determines constitutionality based on several factors, which include an interpretation of the meaning of the words and sentences in the bill and the applicable law. In this case, Section 13 of the AZ Const., Part 2.  The criterion used begins with the ordinary meaning of the words being definitive and if a word is ambiguous, to rational interpretations of the wording of the bill.  It then looks at other criteria such as the intent of the legislature, if necessary to arrive at an interpretation that reconciles any seemingly contrary views.

Disorderly Conduct

To better understand the nature of the “disorderly act” in question let’s take a look at the relevant constitutional sections and House Rules.  Was a House Rule broken is the key issue?  Section 13 is a simple, direct statement:

“Every act shall embrace but one subject and matters properly connected therewith, which subject shall be expressed in the title; but if any subject shall be embraced in an act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be embraced in the title.”  

House Rule 16, referring to Section 13, is a simple direct statement:  “To comply with this requirement, an amendment may not expand the scope of the original bill to give it a new purpose.”  

House Rule 1 is a simple direct statement:

“The House may punish its members for disorderly behavior and may, with the concurrence of two-thirds of the members elected to the House, expel any member (Arizona Constitution, Article IV, Part 2, Section 11). A violation of any of the House Rules shall be deemed disorderly behavior.”

It’s quite clear that House Rule 16 was violated by Ugenti and it is disorderly behavior. What is there to interpret in these applicable legal authorities quoted above?  She is subject to discipline if so decided by the House leadership unless she gets, for political reasons, special dispensation. 

Good faith unconstitutionlity

To put the Ugenti incident, “it happens all the time,” into perspective, let’s look at the recent appellate court opinion in Niehaus v Huppenthal (CV-CA 12-0242 Div. 1) alleging that the Arizona Empowerment Scholarship Accounts (ESA) statutes  violated the Constitution, Article 9, Section 10.[i]  The plaintiffs argued “that the ESA is invalid because it conditions the availability of a public benefit on a waiver of constitutional rights.”  The waiver dealt with a requirement not to attend public schools (a public right) if receiving ESA aid, which the court denied and also denied the complaint. This case was a legitimate question of good faith differing interpretations of the constitution and laws, where one party said Yes and the other said No.  The court gave its binding interpretation.

However, this is definitely not the case with Ugenti and SB 1454.  What is there to interpret and where is the good faith, rational alternative interpretation of the constitution?  Anyone can see the obvious black letter violation. Unlike the bills alluded to by the spoke persons, the inclusion of HOA amendments can only be seen as an intentional and knowledgeable act causing the bill to become unquestionably unconstitutional. It was also a violation of House Rule 16. The everyday meaning of Section 13 and the House Rules are quite clear and there is no room for any rational alternative interpretations.  The Arizona Attorney General’s office, representing the Legislature, agreed that the SB 1454 violated Section 13 of the AZ Constitution and offered to settle. The court declared it so.   

Motivation

What is really at issue is why Ugenti violated the constitution and rules?  Failing to conduct an inquiry amounts to a failure to do justice.  Committing an intentional violation cannot be treated as acceptable conduct for an elected official, a legislator.

So we must ask: What was Ugenti’s motivation for her last woman standing act at the last session? We know she told the GOV committee that she had “a responsibility to the HOA stakeholders,” a group that does not include homeowners nor HOA directors. We know the stakeholders held meetings on SB1454 and HB 2371, its forerunner.

In her defense, Ugenti has blamed some mysterious staff person or House attorney for her action, claiming that she was advised that SB 1454 was not unconstitutional. (I am told that the House Ethics lawyer said he gave no such legal advice).  She took this “advice” with its unreasonable interpretation, but allowing for plausible deniability, that somehow using the word “election” in one of the HOA amendments was OK.  It allowed all other HOA amendments to also be germane to the subject of the title.  This defensive argument is not rational by any means, is without merit, and as attorney Tim Hogan commented, “That’s a far stretch.” 

Removal of ‘HOAS’

And let’s not forget the weak defensive argument that the question is really about the “short title” and not the “title” itself; that the title did list the HOA statutes being amended and no error was committed.  But, the title did not contain the wording “Relating to HOAS,” as required by the bill drafting manual, that would have identified and alerted the public to the additional subject matter.  With over 1,000 bills before the legislature, the first and primary vehicle to identify bills is the index to the bills that only shows the short title.

Furthermore, a disciplinary investigation should also look into the matter as to who changed the title of SB 1454 removing “HOAS,” which can be still found on the Arizona Capitol Times and ADRE (real estate department) websites.  ARS 41-1224 makes the tampering of an introduced bill a class 4 Felony (1 – 3.5 years prison time). But, the wagons are being circled and a cover up is becoming apparent.

The settlement agreement bypassed any exposure or testimony relating to the motivation for her disorderly behavior.

Intent to deceive

If we examine the events surrounding these HOA amendments that had their origin in several bills that were combined into HB 2371, and then added to SB1454, it follows that there was an intent to get a twice failed bill made law. It was an intent to accomplish this by violating the Arizona Constitution in a desperate last ditch attempt in the closing hours of the legislative session.

For these reasons disciplinary action is warranted as set forth in the House Rules.  The people seek transparency and have the right to know just what happened!

Notes

[i]Aid of church, private or sectarian school, or public service corporation

Section 10. No tax shall be laid or appropriation of public money made in aid of any church, or private or sectarian school, or any public service corporation.