Tag: legislature

What is the HOA liability for wrongful acts by its security officers?

 

As a private government, HOAs are not subject to government immunity as other government entities.  Its officers are not covered by limited immunity for discretionary decisions as government officials are.    Can the HOA board escape liability because they are volunteers?  Does their D & O insurance cover such negligence as appears to have occurred in the tragic incident described below?  Or escape liability under the pro-HOA attorney’s business judgment rule defense (my emphasis)?

 

The business judgment rule thus provides significant protection to directors (and officers) from personal liability for their good faith, informed, business decisions. The presumption may be rebutted where it is shown that a director . . . did not inform himself of all information that was reasonably available, failed to exercise the requisite level of care . . . .

 

In other words, doesn’t the HOA board of directors have a duty of care as a prudent person acting in good faith, and under fiduciary duties to the HOA to properly supervise and oversee the acts of their agents?    Under agency law and tort respondeat superior liability, the answer is YES.   And how much can that liability amount to?   Millions of $$$?  I think in the following incident it could well be.

I call your attention to the killing of a 17 year-old in a gated Florida HOA by an armed HOA security guard who is not even a police officer.  Read this report and judge for yourself:  Shooter of Trayvon Martin a habitual caller to cops.  By what authority do HOA governments usurp legitimate public government police powers to stop and detain others?  A recent Illinois court says that stopping and detaining, no less shooting others, was a violation of government authority. See How far will independent HOA principalities go in usurping police powers.

HOAs must be held subject to the Constitution and the laws of the land.  They must not be permitted to hide behind exaggerated claims of “private contract” exclusions and escape application of the 14th Amendment that applies to all legitimate public government entities. They must not be permitted to escape application of their state’s constitution and its Declaration of Rights.

Good night and very good luck – the unspoken media HOA alliance

I hope that the paraphrased quote of, “Good Night and Good Luck,” the signoff by the renowned Edward R. Murrow, who was the only journalist to openly oppose the commie scare by Sen. McCarthy in the 50s, is recognized by the news media. The media of today, especially the local news media, the young and laughing personalities of the 5:00 PM news seem to be totally oblivious to important HOA bills before state legislatures. Bills that would affect some 20% of the people in across the country.

Why? It seems that they prefer to see no evil, hear no evil, speak no evil about HOAs. Or is it really corporate media making the call?

Murrow, upon leaving the CBS network in 1953 had this to say about the TV news media.

Our history will be what we make it. And if there are any historians about fifty or a hundred years from now . . . they will there find . . . evidence of decadence, escapism and insulation from the realities of the world in which we live. I invite your attention to the television schedules of all networks between the hours of 8 and 11 p.m., Eastern Time.

We are currently wealthy, fat, comfortable and complacent. We have currently a built-in allergy to unpleasant or disturbing information. Our mass media reflect this.

Are the big corporations who pay the freight for radio and television programs wise to use that time exclusively for the sale of goods and services? Is it in their own interest and that of the stockholders so to do?

Since this statement was made, the news has become highly editorialized and selective, geared to entertain. It appears that providing important matters of civic concern affecting their private property and community to their viewers is a secondary concern, and only such information as the media moguls deem to be appropriate. (For a brief history of Arizona’s HOA news coverage, see Arizona HOA News History).

There have been no in-depth analyses or debates of the HOA legal concept even at the national level, as the spread of HOA-Land is nationwide. The Sunday news talk shows, or by 20-20 and Dateline, are silent. There have been no discussions on whether HOAs, as de facto governments, should by made a government entity. Or whether state legislatures should continue to allow equitable servitude law to supersede contract and constitutional law. Or the lack of debate on the absence of “truth in HOAs” disclosures, similar to truth in lending and truth in advertising.

Or what is the legitimate government interest to allow private governments to deny the equal application of the laws. Or to allow constructive notice – just take your deed — to bind unsuspecting home buyers to the CC&Rs sight unseen. Apparently there is no need to inform buyers at closing of the great leap that they are taking into the unknown.

Doesn’t the news media understand, haven’t they been taught in journalism 101, that silence carries an acceptance of conditions and events. With no opposing views, what do they think their viewers will accept and believe. Obviously, “No news is good news.” And this silence has helped generate the national groupthink that “HOAs are the next best thing to Mom’s apple pie.” This silence helps generate an inbreeding, a closed group without outside reality testing for verification. (See the seminal work by Irving Janis, Victims of Groupthink, 1972).

Here’s what the activist group, Psychologists for Social Responsibility (PsySR), has to say about groupthink (my emphasis).

A group is especially vulnerable to groupthink when its members are similar in background, when the group is insulated from outside opinions, and when there are no clear rules for decision making. Groupthink occurs when groups are highly cohesive and when they are under considerable pressure . . . . When pressures for unanimity seem overwhelming, members are less motivated to realistically appraise the alternative courses of action available to them. These group pressures lead to carelessness and irrational thinking since groups experiencing groupthink fail to consider all alternatives and seek to maintain unanimity. Decisions shaped by groupthink have low probability of achieving successful outcomes.

And PsySR finds fault with the media for failing to inform its viewers about the alternative views of others.

Knowledge is power and we as citizens and as a nation are becoming less powerful. The American press, especially the television news media, has let down the American people and the American people have allowed this to happen. US television news is geared more toward providing entertainment than information.

We can now answer why this silence, why this unspoken alliance of no negatives about HOAs. The history of the media’s role with respect to substantive issues on HOA constitutionality, and other legalities, has gone through four stages: 1) repeat what the special interests have to say, 2) allow advocates to speak out in opposition, 3) report only favorable stories, and 4) withdrawal from the controversy. (See Arizona HOA News History).

The reason for this withdrawal by the media can be found in their realization that the HOA legal concept cannot be defended without renouncing the US Constitution and our system of democratic government. In short, any such attempt would be Defending the Indefensible. So, silence is the only option if one truly believes, in spite of the overwhelming evidence, that HOAs are better than Mom’s apple pie.

With that I say, “Good night and good luck.”   Those of you living in HOAs surely need lots of it.

Who is the only true HOA stakeholder?

I’m tired of hearing the term, stakeholder, over and over again by CAI, and used by others including legislators. I don’t think that they know the real meaning of “stakeholder” as bastardized by CAI. Let me explain.

The term or concept of “stakeholder” is not found in the HOA “bible,” the Homes Association Handbook of 1964. I cannot find it either HOA texts, in the 1992 book by Prof. Jay Dilger, Neighborhood Politics, or in Prof. McKenzie’s 1994 book, Privatopia. However, McKenzie describes the beginnings of CAI in 1973 as an organization to solve the problems with HOAs. It was to consist of various “interest groups” that had an interest in making the HOA legal scheme work.

Even then, the real focus, as is today, was on the HOA directors and not on the homeowners per se – the five groups were: public officials (rapidly departed), professionals (attorneys), managers, developers and “homeowner associations directors (referred to by CAI as ‘homeowners’)”. Under “professional” there was reference to landscapers and accountants, etc., which makes these stakeholders also equal partners in your home, according to CAI. Gee, what would your spouse say to that? Talk about redefinitions and “newspeak.”

The term or concept of “stakeholder” is also not found in the 2000 CAI – ULI jointly funded testament to CAI, Community Associations, by Donald R. Stabile. But, in his discussion of history, Stabile speaks of The Homes Association Handbook (1963), “To establish the satisfaction all components of the housing industry expressed for [HOAs] . . . TB50 evaluated the perspectives of each [group].” It reflects the concern of various business interest groups – the stakeholders (this term is not used by Stabile), but not the homeowners, just the “association owners.” Stabile does point out that CAI was initially organized (1973) by these same groups of “interested” parties necessary to make the problems with HOAs go away, but then again, he mentions “homeowner leaders of associations,” but not homeowners.

 I believe this was the genesis of what later became the CAI argument that the stakeholders have an equal stake in the member’s private property home, for which the owner alone has monetary liability.

It should be obvious by now that the term “stakeholder” as used by CAI definitely excludes the homeowner, and has evolved from the long term focus on the “interest groups” with a stake in selling and making the HOA concept a success. It is obvious, too, from the false and misleading statements before Arizona legislative committees that CAI had met with all the stakeholders, but not one homeowner rights advocate was ever invited or attended these stakeholder meetings, just who CAI sees as “stakeholders.”

No HOA reforms? blame it on the legislature

As of this morning, of the 16 Arizona HOA reform bills that I’ve been following, only 3 bills have a chance of becoming law: HB 2160, elections reform, HB 2170, HOA cannot charge escrow agents for fees, and SB 1239, zoning board prohibitions against mandatory HOAs. The 3 bills carrying penalties against wrongful acts by HOA boards, and holding the boards accountable, are all DEAD!

Except for the possible penalties in regard to elections, there are no deterrents to the intentional abuse and violations by the HOAs regarding fines, failures to provide corporate documents, or to respond to homeowner inquires in order to resolve payment disputes.

The absolute “sanctity of contract” argument by CAI lobbyists continues to be thrown at the legislators, and shamefully accepted by many. This acceptance by these legislators insults homeowners as it carries an implied attitude that homeowners are masochistic, and openly and fervently signed a solid contract to be treated harshly if they dare raise a question — the “a contract is a contract no matter what” excuse to deny your rights. Shameful!

Actually, if they had consulted their legislative council, there are indeed restrictions on the validity of covenants, — not everything goes. (Remember, we must educate the legislators otherwise they will continue to accept the “gospel of HOAs” from CAI, as taught in their “educational” indoctrination classes and seminars).

Covenants that are 1) contrary to public policy, 2) arbitrary and capricious, 3) unreasonable, and 4) unconstitutional are invalid no matter if they were approved by the membership. And that’s the whole point of the issue: HOAs and legislators cannot ignore the laws of the land and do as they please, in spite of what the CAI attorneys like to proclaim. But, some legislators actually believe in “everything and anything goes.”

NOTHING WILL CHANGE UNTIL THE LEGISLATURE STOPS SUPPORTING DE FACTO HOA GOVERNMENTS AND RECOGNIZES HOAs AS DE JURE GOVERNMENTS SUBJECT TO THE LAWS OF THE LAND, AS REQUIRED OF ALL OTHER GOVERNMENT ENTITIES

Under these conditions, do not ask for assistance unless you have the personality and will to fight for your rights all by yourself, and are willing to spend your money to do the state’s job for them, JUST MOVE OUT! The laws and governing documents all favor the HOA against you and the rights that you thought could not be taken away.

AZ House supports HOA dominance over municipalities

In an unbelievable acquiescence to the secession of legitimate public government control to private government HOAs, this bill, SB 1113, regulating public streets within HOA subdivisions,  was soundly rejected by the House Judicial Committee. Welcome to the New America of HOA-Land brought to you by your elected representatives who take an oath to uphold the Arizona and US Constitutions.  The bill was defeated 2 – 6.

The only worthwhile commentary was from the Chair, Rep. Eddie Farnsworth, who concluded with, “I find it disturbing that this committee rejected this bill because the police says its too difficult to enforce.”  Nationally known Sheriff Joe Arpaio was against the bill.  Farnworth also remarked that the political realities of the 2,000 member exclusion amendment was needed because of the “highly paid lobbyists like the one you see before you,” referring to CAI lobbyist DeMenna.

And still, there are those who truly believe that the Constitution is only about the absolute right of HOAs to write contracts that supersede the Constitution.

I am continually amazed that some legislators still use this as an excuse to stop bills that seek to reign in lawless conduct by HOA boards.   Legislators who do not want to hold boards accountable under the laws of the land are condoning HOAs as above the laws of Arizona, above the Arizona and US Constitutions.  Surely they must realize this.  Surely they do not realize the consequences of this unexplainable position on HOAs.

The failure of the Judiciary Committee to pass this very important bill to prevent private entities from usurping legitimate government functions is very disturbing.  The purpose of a committee is to recommend a bill for the entire body to consider, and not to kill such an important bill and thereby not giving all the elected representatives  their due voice.   This is politics under the influence of special interests.

If the HOA boards and officers refuse to join our democratic society, then they should be allowed to fail!  It is unconscionable to do otherwise!  If this is too much for some people, that their “free ride” is over, well, then they can just move out!

Once, long ago, America had people of character, of integrity and of honor.  Now, it’s just “what’s in it for me” and “how will it affect my legacy” — self-centered concern about themselves and not about their responbilities and duties as public servants for the people.  The people have the right to expect that their elected representatives would protect their rights and freedoms under the Constitution, and not to support the unconstitutional delegation of legislative powers to private entities.