Tag: legislature

A united, national front to HOA reform legislation

A private Facebook group has undertaken a gallant and tedious effort to inform advocates across the country proposing reform legislation. Its Admin, Patrick, provides a list of numerous bills that are applicable to all states with modifications. Thus, I proposed a broad sweeping “intent section” by the homeowner rights advocates to be included in all proposed legislation under the Homeowner Reform Leaders National Group (HRLING). It should be added as the last section to all bills, e.g., “Section2. Intention of . . . HRLNG.”

As for specific legislation I proposed, I make reference to the “Homeowner Association Consent to be Governed Agreement An Act (to be known as the ‘Truth in HOAs’ Act,” paragraphs 1 and 4, March 2011).

  1. “No provision of any contract or any declaration of covenants, conditions, and restrictions affecting lawful property uses of residences in a subdivision or condominium is enforceable in this state unless the party seeking to enforce the provision proves by clear and convincing evidence that 1) the provision being enforced was knowingly and voluntarily agreed to by all parties against whom it is being enforced; or 2) all parties against whom the provision is being enforced knowingly and voluntarily agreed to be bound by the provision without reading or understanding it.
  2. “Therefore, the CC&Rs or Declaration for any planned community, condominium association or homeowners association shall state that, ‘The association hereby waivers and surrenders any rights or claims it may have, and herewith unconditionally and irrevocably agrees to be bound by the US and State Constitutions and laws of the State as if it were a local public government entity.’”

HB 919, the FL Bill of Rights for homeowners

On Friday, Miami-Dade State Attorney Katherine Fernandez Rundle joined Miami-Dade County Mayor Daniella Levine Cava and State Representative Juan Carlos Porras to announce a measure that would protect condo owners of abusive HOA board members.   (See Proposed new bill would protect HOA homeowners – CBS Miami (cbsnews.com)

The bill, HB919, will be The Community Associations Bill of  Rights for Florida.  It is a necessary 60 page omnibus bill since over the years so much has been denied homeowners far too long.  The numerous protections being added include:

  1. Restrictions on use of reserve funds;
  2. The appointment and duties of the association recordkeeper;
  3. The types of records to be maintained;
  4. Director conflict of interests;
  5. Provisions against SLAPP suits and forwarding by the FL Division of Condos of suspected criminal activity the law enforcement agencies;
  6. Director obligations to act in good faith and act as a prudent person would in the best interests of the association;
  7. Officer –  Director qualifications.

And much more.

Floridians have no choice if they truly seek reforms but to actively support this bill, HB 919,  and its sponsors: State Attorney Rundle, Mayor Cava, and Representative Porras.

AZ legislature fears HOA failures if homestead protection permitted?

Why is the exclusion of homestead protection for private HOAs a matter for  the AZ Senate FIN committee?  Is the committee afraid that HOAs will begin to fail in droves due to dead beat members retaining up to $400,000 in homestead exemptions if foreclosed on? (The HOA equivalent to public taxes).  That’s odd, because for years CAI has presented surveys that all is well in HOA-Land with a 70% – 80% member approval.  Or is there fear mongering going on again?

H’mmm.  Suppose now that the fear is real and down go the HOAs, mainly on the directors failure to manage the HOA’s funds.  Why then should HOAs get preferred treatment in violation of the Arizona Constitution, Article 2, Declaration of Rights? Let them fail as any other poorly run organization!

§32. Constitutional provisions mandatory. The provisions of this Constitution are mandatory, unless by express words they are declared to be otherwise.

§13. Equal privileges and immunities.. No law shall be enacted granting to any citizen, class of citizens, or corporation other than municipal, privileges or immunities which, upon the same terms, shall not equally belong to all citizens or corporations.

If the committee, and Legislature, proceed to withhold homestead protection then their act would be a clear violation of the AZ Constitution and subject to an easy challenge. It has happened in the past and the homeowners won! AZ Attorney General admits SB 1454 HOA to be invalid and without effect.

HOA Homestead Exemption Exclusion (SB1470)

`Please pass SB 1470, homestead protection for the people.

History of Homestead Exemption HOA Exclusion (SB1470)

In 2004 ARS 33-1806(3)(h) was added to the mandatory disclosure requirements, requiring a buyer to sign an acknowledgment that he agrees to the loss of his homestead exemption (now $400,000). Just one year later, in 2005, the statute was again amended to remove any reference to the loss of the homestead exemption.  In 2007 Governor Napolitano vetoed the homestead exemption bill on a flimsy argument – to many subjects.

Today, ADRE (real estate dept)  still does not inform consumers of the loss of their homestead exemption.

In 2007 I wrote, in part,

“They [CAI] raise the issue of a consensual agreement, the unsigned CC&R ‘agreement,’ which, under Arizona statutes, is an exception to the application of the homestead protection.  The author of the S/E amendment to the bill, Representative Farnsworth, made quite clear that ARS33-1807(A), which opens with, ‘The association has a lien . . . .’ (emphasis added), is a statutory lien and not a consensual lien – the homeowner has no choice in the matter whatsoever. 

“Any reference to a consensual lien must come from a voluntarily entered agreement, and, not from a statute. Our concern here is the alleged CC&Rs consensual agreement that may contain a provision for an agreement to a lien for unpaid assessments and the right to foreclose.  No CC&R that I have been made aware of mentions a surrender or a consent to the loss of the homestead exemption.  No real estate purchase agreement that I am aware of mentions an agreement to surrender the homestead exemption. The CC&Rs have been held as binding, not as a consensual agreement per se, but by the application of the doctrine of constructive notice, or the simple posting to the county clerk’s office.” 

This is the Legislature’s second chance to restore the equal protection of the laws to homeowners in HOAs. There is no justification for denying homestead protection when.

Resources

ARS Title 33, -Ch. 8

 33 – 1101. A. Any person the age of eighteen or over, married, or single, who resides within the state may hold as a homestead exempt from attachment, execution and forced sale, not exceeding $400,000 in value, any one of the following:

1. The person’s interest in real property in one compact body upon which exists a dwelling house in which the person resides.

2. The person’s interest in one condominium or cooperative in which the person resides.

33-1103. Homestead exemption; extent of exemption; exceptions

A. Real property that is subject to the homestead exemption provided for in section 33-1101, subsection A is exempt from involuntary sale under a judgment or lien, except in connection with:

1. A consensual lien, including a mortgage or deed of trust, or contract of conveyance.

33- 1256; 33 – 1807. A. The association has a lien on a unit for any assessment levied 14 against that unit from the time the assessment becomes due.

SB1470 (Feb. 13, 2023)

C. Subsection B of this section does not affect the priority of

10 mechanics’ or materialmen’s liens or the priority of liens for other

11 assessments made by the association The lien under this section is not

12 subject to chapter 8 of this title.

The need to regulate CAI monopoly

To answer to the question I raised, “Is CAI a coercive HOA monopoly?,” required further research and analysis, which resulted in  finding extensive and strong evidence, gathered from over the years, that CAI is definitely acting in violation of the anti-trust statutes; steps need to be taken to break up the monopoly.  Below are my recommendations to regulate CAI’s activities to allow for the voice of others to be heard, especially from owners of HOA homes who suffer under the monopoly.

A.       Regulations on CAI monopolistic activities

1.       CAI to cease all references and implications that it represents HOAs before the legislature, all government bodies, before the courts and including amicus curiae briefs without express consent to do so;

2.      Require CAI to state that it is a business trade nonprofit, explicitly a 501(c)6 and not an educational entity;

3.      Inform readers that it cannot have HOAs as members since HOAs are consumers of the services provided by the trade group members;

4.      It is actively engaged in lobbying state legislatures on bills favorable to the HOA  and not necessarily to the membership;

5.      Inform owners and the public in general that its attorney members represent the HOA personified by the Board of Directors and not the member.

B.    Regulations on HOA activities in support of CAI monopoly

1.       Similar to representing employees in bargaining with management, propose federal laws that permit and protect HOA members to organize its membership to bargain in good faith for amendments to the governing documents and Rules changes;

2.      Propose legislation that allows for the creation and protection of a national HOA Homeowners Coalition, similar in intent as the National Labor Relations Board (NLRB);

3.      To restrict the HOA from interference with the newly established  organized national and state  member entities;

4.      Quarterly inform the membership of the number of directors, officers, managers, and attorneys who are members of CAI;

5.      Publish the total annual amount of spending for CAI dues paid for any HOA members, donations, other fees, and expenditures paid for by the HOA;

6.      Inform the membership that all communications with their attorney are not exempt from disclosure by state law,

7.      and all communications with the HOA attorney constitutes corporate documents that are accessible to the members, unless explicitly exempted under  “Pending or contemplated litigation” apply;

8.     The CC&Rs or Declaration for any planned community, condominium association or homeowners association shall state that, “The association hereby waivers and surrenders any rights or claims it may have, and herewith unconditionally and irrevocably agrees to be bound by the US and State Constitutions and laws of the State as if it were a local public government entity.”