Tag: legislature

Call for HOA action: “Occupy Wall Street” vs. Occupy the Legislature

“Occupy Wall Street”! What a way to get attention! How about an “Occupy the Legislature” demonstration against unjust and unfair HOA foreclosures with their intimidation, threats, and cruel and unusual punishment? In every state — especially Florida, Nevada, Arizona, Texas and California.

The pro-HOA supporters’ reason for the need for foreclosure rights can be found in the defective HOA legal scheme that is similar to a partnership. In partnerships there are a limited number of financial supporters, the owners, who are jointly and severally responsible for all the HOA debts — those with the money pay for those without the money. A legality. And like a privately held small business, the financial base is relatively small and limited to the homeowners who have very little practical means to escape their obligations by leaving the HOA.

Those who feel that foreclosure is needed need to ask themselves, Does the means justify the end? An “I don’t care” response is unacceptable, and legitimizes the authoritarian HOA government. Foreclosure is a special law for a special group that violates state constitutions — the equal protection of the laws, special laws for private organizations, and “color of law” constitutional violations. No state has declared its intent or purpose for the statutes – they wouldn’t dare – that justifies a legitimate government interest that can withstand judicial review of the statute. And that review is a strict review that looks to a necessary and compelling reason to deprive citizens of their rights.

And remember, there is that huge cloud hanging over the genuine and freely given, after full knowledge of all the material facts, consent to the CC&Rs. CC&Rs, a real estate doctrine based on equitable servitudes and not constitutional law, do not legally require an explicit signature or explicit surrender or waiver of constitutional rights, or for a bona fide consent to be governed by the de facto HOA political government.

Homeowners must let go of their irrational fears that the HOA would be shut down. They must stop their blind adherence to the CAI chant of “no government intervention” that really is a belief that HOA governments, unaccountable to the Constitution and state governments, are far better than public government with its police powers to protect citizens from abuse by other citizens.

An Occupy the Legislature movement is a grass roots, ground level action. It must come from local homeowners organized under local leadership, behind a fixed purpose. And right now, “Stop HOA foreclosures” is a very appropriate mission.

See HOA foreclosures:  will the real CAI stand up

HOA foreclosures: will the real CAI stand up

In reading the Carpenter Hazlewood (CHDW) October 28, 2011 eNewsletter, Lien Foreclosure: Is it Still a Viable Option?, I asked myself : Did the CAI attorneys lack “candor toward the tribunal” (as required by attorney Professional Conduct Rule 42, ER 3.3, as can be found in all states) when opposing foreclosure reforms all these years? It seems that CAI presents more than one personality, more than one face, depending upon its audience. CHDW (and CAI firm Ekmark & Ekmark) had vehemently opposed foreclosure reforms as far back as 2004 when, in Arizona, HB2402 sought relief and justice for homeowners. Never once did the legislators hear what is now admitted to in this article by Ms. Patel.

The following excerpt from Who prosecutes on behalf of homeowners in HOAs? (2010) reveals the attitude of CAI lawyers in 2004. Through the questioning and testimony of Ms. Koepke (Ekmark & Ekmark) by the FMPR committee in February 2004 (based on the audiotape record of the committee hearing), we learn,

In her testimony Ms. Koepke had stated that she was an ethical person of integrity who foreclosed only as a last resort upon the instructions of her HOA clients. However, she had a problem with making use of alternative methods of collecting debts as are available to all lien holder in other arenas, and saw no moral issue with completely stripping the homeowner of all his equity for a few pieces of silver. Her justification was that they were “scofflaws” who needed to be punished to deter future untimely payments. In the complete audio, you will hear the committee Chair informing Ms. Koepke that such actions were “unconscionable.” I added a commentary as an addendum, which presented a few background cases and incidents in which Ms. Koepke was involved. This short commentary video can be found at Foreclosures.

A few important questions not answered by the CAI attorneys are: 1) Why should the HOA be allowed foreclosure rights when it has not advanced any real, hard cash like a bank or other lender? 2) Why aren’t alternative means of collection, as available to all other entities, not satisfactory? and 3) Why this special right for HOAs?

The current Patel article, addressed to HOA directors and managers not the legislators, shows another attitude toward HOA foreclosure.

Assuming foreclosure eligibility requirements are met, whether foreclosure is a viable option depends largely on what other liens, interests, and encumbrances burden the subject property. . . . If the property is not subject to a mortgage or there is a minimal first mortgage, foreclosure is a viable option as there is likely equity in the property. . . . Even if the property is subject to a recorded first mortgage and there is no equity in the property, foreclosure still may be a viable option. Sometimes the threat of foreclosure alone is enough to get a delinquent owner’s attention. . . . the owner will often pay the association in order to keep his/her home.

This is an admission of the discriminatory nature of the foreclosure process — works only if the homeowner was an upstanding citizen who had paid his mortgage and assessments for many years, and had created all that equity that the HOA now seeks. It is also an admission of the punitive and intimidation motives of the HOA — “the owner will often pay the association in order to keep his/her home” — without facing the reality that “you can’t get blood from a turnip”! What the foreclosure process does do, and is not mentioned by these CAI attorneys, is that the attorney can claim fees many times in excess of the amounts owed the HOA.. So, who really benefits? Is this good public policy?

Important questions for all homeowners:

1. What are the CAI attorneys telling your legislators today?

2. Are they being candid with the legislators, or are they pursuing their — the CAI, not the HOA – personal agendas?

3. What are you doing to make sure the legislators are being given the whole story?

 

For further reading . . .

Special Message to McCain and Obama on Homeowner Protections in HOAs

Right to Foreclose laws are supposedly good for HOAs, so why are fees increasing?

Do HOA foreclosures violate 14th Amendment?

Homes in HOAs are Lifetime Collateral for HOA Survival

In HOA-Land, Halloween is verboten!

Texas Neighborhood Tells Family to Remove Halloween Sign From Yard.

This is one very serious aspect of how HOAs have redefined the American community, not only its landscaping aesthetics, but America’s social and political customs, traditions, and system of government. And all made possible by cooperative and biased state legislatures and courts that uphold the CC&Rs as if they were a contract, yet fail to apply “Contract Law 101” to these supposedly valid contracts.

The application of contract law, and constitutional law, would immediately invalidate the CC&Rs and the legal HOA scheme based on the seminal Homes Association Handbook of 1964.

Welcome to the New America of HOA-Land.

AZ legislation needed to insure justice and to stop OAH abuse

Legislation to stop further HOA abuse at the Arizona Office of Administrative Hearings is in order today. Signs of potential abuse are surfacing, and we must act ASAP to stop it immediately.

From the OAH website, “Pointers” link, here’s what OAH has to say in 2001 about pre-hearing conferences: THE PRE-HEARING CONFERENCE – IT WORKS (emphasis added).

Once a request for a hearing date is filed with the Office of Administrative Hearings, the parties can expect a setting within a quick and short time, leaving a precious minimum of adequate time for pre-hearing discovery and preparation. A pre-hearing conference will help counsel and parties to get around these two obstacles. Both discovery and a reasonable timeline – which will insure better preparation for an effective hearing – can be obtained through a pre-hearing conference. Early settlement discussions can also be triggered. . . . One possible negative of an early request, however, is that the other side may not be fully prepared, but this exposes a situation that you may wish to know early.

The above reads much like the “quick and dirty” technique — my words — of a motion for summary judgment, legal as it may be. It contains contradictory assertions that justice will be served due to pre-hearing conferences, and that the “other side may not be fully prepared, ” which in our HOA context applies to the Pro Per homeowner.

It appears that the two Petitions invoking the pre-hearing conference, of the first 3 OAH Petitions, reflects a move to “get the case quickly closed.” Note that the pre-hearing conference must be requested, and we know by whom, or by the sua sponte by the ALJ, “on his own”. My recollection of the initial 2006 – 2009 phase recalls just a few pre-conference hearings. The 2001 belief, unsupported in the HOA adjudication environment where the homeowner does not use an attorney, states,

Once a pre-hearing conference has been held, the Administrative Law Judge and counsel will know each other better. Subsequent status or telephonic conferences are easier to have once everyone knows each other better. Therein lies a powerful but not always evident benefit of an early pre-hearing conference – positive rapport and trust can be established among the participants.

There is a legitimate concern of an abuse of process. The belief expressed above assumes that the HOA attorney is acting in good faith and not abusing the process. However, 2008 legislation, in particular HB 272 4 and SB 1162, challenged this assumption (sadly, they were defeated). See Arizona HOA cases update — OAH and HOA adjudication at OAH: a rebirth of constitutionality, abuse, and legislation. There is no reassurance that justice will be done by this procedure — this is NOT civil court, and to turn OAH into civil court only serves the HOA attorneys.

There is no mention of allowing the homeowner to revise his Petition or Response, or to extend the hearing date, or to allow more time for discovery by the homeowner. The important value of OAH adjudication is to level the litigation playing field in the interest of fair play and justice, and not to force the homeowner to hire an attorney to deal with the rules of civil procedure as used in the courts. And I have a further concern, because (emphasis added)

Under the rules of the Office of Administrative Hearings, the Administrative Law Judge is not required to memorialize the outcome of a pre-hearing conference (see OAH procedural rule 19-112). Therefore, the best practice is to request that the Administrative Law Judge issue a written pre-hearing order memorializing all directives and agreements.

This means no minutes and no audiotaping which served the interests of justice so well in the first go-around of OAH adjudication in the 2006 – 2009 period. These invaluable hearing audiotapes exposed the conduct and attitudes of the HOA and its attorneys, allowing the public to hear the nature of the HOA’s evidence and justifications for its actions. It is hard to reconcile their performance at OAH with their public statements implying a good faith, for the community, motive.

It appears that the HOA attorneys, like their HOA clients, do not want the public to know what really goes on in HOAs — hurts property values. Homeowners demand justice and fair play, and expect the Legislature to act accordingly and to protect them from abuse — helps property values.

HOA adudication at OAH: a rebirth of constitutionality, abuse, and legislation

It seems that with the “rebirth” of Arizona administrative agency adjudication of HOA disputes in 2011, CAI and other the pro-HOA supporters want to stifle this due process protections that has leveled the litigation playing. Although not the answer to all issues, with its 42% win ratio favoring Pro Per homeowners, it is a very good start. In continued attempts to deny homeowners a fair and just hearing, the first OAH case in 2011 reveals a challenge to the constitutionality of the new statute, feeble as it may be. To better understand the issues at hand, let’s review the activity took place in two arenas in 2008: the courts and at the legislature.

1. Courts. After several prior years attempts to obtain a just hearing process in HOAs, a hard fought battle resulted in the passing of HB 2824 in 2006 that established OAH adjudication of HOA disputes. After a full year of complaints in 2007, 2008 started with several constitutional challenges to the new laws. Starting early in 2008 with Waugaman and the OAH appeal to the superior court, the new statute was found unconstitutional. At the close of the year the Merrit OAH case broadened the court ruling to apply to all HOAs. At the same time of Waugaman, Gelb filed an OAH Petition that resulted in an appellate court affirmation of the superior court ruling in 2010, making the ruling precedent.

2. Legislation. While the CAI attorneys attempted to end OAH adjudication, legislation was introduced in 2008 to stop the abuse of process at OAH, whereby the HOA attorneys were trying to make OAH just like a civil court proceeding with the formality of the rules of court. The two prominent bills, HB 2724 and SB 1162, were defeated, but they caused panic in CAI and with HOA attorneys. Among other things, these bills sought:

HB 2724

“notwithstanding any provision of the declaration, an amendment to the declaration is void and unenforceable against any unit owner who entered the association before the adoption of the amendment unless the amendment was approved by unanimous consent of all unit owners . . . .”

the association shall enforce that provision of the condominium documents against all other unit owners who can reasonably and readily be determined to be in violation. . . . the association bears the burden of proving that the association enforces that provision uniformly. . . . Any provision in the condominium documents that is not uniformly enforced pursuant to this section is deemed unenforceable for purposes of any pending enforcement action.

Except as expressly prescribed in this chapter, the requirements of this chapter including any rights conferred by this chapter shall not be modified by agreement or otherwise waived. A person shall not use any device to evade the limitations or PROHIBITIONS of this chapter.

SB 1162 (two separate issues presented)

A. Amendments. “An amendment to the condominium documents does not apply to any court or administrative action filed before the amendment is adopted.”

B. Attorney fees – penalties.

the administrative law judge shall not award attorney fees or costs and a court shall not award attorney fees or costs in any appeal from an administrative order unless the administrative law judge or court makes a finding that the attorney or party did any of the following:

1. Brought or defended a claim without substantial justification.

2. Brought or defended a claim solely or primarily for delay or harassment.

3. Unreasonably expanded or delayed the proceeding.

4. Engaged in abuse of discovery.

If the administrative law judge or court makes a finding pursuant to subsection C of this section, the administrative law judge or court may allocate the payment of attorney fees among the offending attorneys and parties . . . [This was designed to punish the abusers, the HOA attorney and HOA, as the homeowner was overwhelmingly a Pro Per.]

“without substantial justification” means that the claim or defense constitutes harassment, is groundless and is not made in good faith.

Please bear in mind that, “Good faith, a state of mind consisting in ((1) honesty in belief or purpose, (2) faithfulness to one’s duty or obligation . . . (4) absence of intent to defraud or to seek unconscionable advantage.” (Black’s Law Dictionary).

Are we seeing a second attempt at abuse of process in OAH adjudication? Today, the first Petition was challenged with a feeble constitutionality challenge. Of the first 3 Petitions filed, 2 resulted in the quick use of a civil court permitted Motion to Dismiss being filed with one Petition having already been dismissed. In the newest Petition, filed just last week, the HOA has not yet responded. As I have previously written, the other Petition appears to be proceeding with a pre-hearing conference, where I suspect a discussion of the Motion to Dismiss will occur. The OAH records are not clear. From the OAH stated purpose of pre-hearing conferences and topics for such a hearing (A.R.S. § 41-1092.05(F)), it seems the question of OAH jurisdiction will be raised a a legal matter – “Clarify or limit procedural, legal or factual issues.”


If this is indeed the case, using motions to dismiss to over-power the homeowner and to avoid any audiotape record of the hearing — an invaluable resource not readily available in trial court proceedings — I strongly urge that legislation be introduced as indicated above to put a stop to this abuse. Legislation to stop “ex post facto” amendments, which is a violation of Constitutional restrictions, must be proposed and sponsored in January.

If, on the other hand, the Petitions did not conform to the statutes for OAH adjudication, then all those looking to file a Petition must read the OAH letter from its Director addressing homeowners in HOA proceedings — Homeowner Petitions Against An Association. A must read for all.