Tag: linkedin

The HOA apathy affliction: a political dynamic

Everyone is unhappy with the pronounced apathy among those living in HOA-Land, where the lack of homeowner protections works for the power-elite, the board and its attorney.  CAI has complained many times about apathy when homeowners complain about the conduct of their boards.  CAI also complains how it can’t make “necessary” changes to the CC&Rs to bring them current with the laws.

Because of this apathy, homeowner advocates who are aware of the inequities of their HOA predicament cannot get their good neighbors — those who pay their dues and obey the rules — to support them in their efforts to obtain justice for all members. 

A recent approach being used by CAI in Arizona is to call for the complete rewrite of the CC&Rs to make the HOA a better place, the ostentatious reason, while including even more oppressive covenants and covenants that are highly favorable to the HOA attorney and its income stream.  In order to accomplish this, recourse is made to playing loosey-goosey with the strict Arizona laws for amending the CC&Rs. 

The law requires a written explanation of each and every change being made, which can be cumbersome, but the law is there to protect the homeowners. It’s a cost of making sweeping amendments all at once.  But the homeowners say and do nothing except to sign away their rights as good team players.

The political impact of these sweeping changes is made real by the apathy of the majority of the homeowners to agree to whatever the board proposes with the blessings of the HOA attorney, who wrote the revised CC&RS.  They can affect your pocketbook, your property rights, and your already weak voting rights.

A common change, minority control, was defeated in the 2011 legislative session that permitted minority control of the amendment process, thereby giving the political machine in power basically complete control of the HOA and over its apathetic members.  This political tactic relies on homeowner apathy to succeed.  It removes a vote of all the members and the long held doctrine of a supermajority vote, usually 67%, and replaces it with a majority vote of only those voting. 

Even with a 50% quorum as little as a 25% approval can affect the rights of ALL members, whether they agree or not.  And with the pro-HOA laws and unconscionable adhesion CC&Rs contract, the members will be just pawns in the hands of the board – just pay your dues and shut up, or else!

Homeowner apathy is a serious affliction in HOA-Land.  Under the current environment, it is the homeowner who must stand up and fight for his rights, in the HOA and at the legislature to change the laws.

Read about the Fourth Amendment to the Apache Wells CC&Rs, one real example. Just scroll down.

Columbia Association: the iconic HOA private government ploy to circumvent the Constitution

In the ExploreHoward.com letter to the editor, CA should not be exempted from Homeowners Association Act, the reader is told that this master, master HOA is seeking legislation to have it declared not to be an HOA.  The writer strenuously objects, saying,

The purpose of the proposed legislation is to immediately exempt CA [Columbia Association] from some of the protections afforded Columbia residents by the Consumer Protection Act, and to exempt CA from all future amendments to the HOAA [HOA act]. . . .  The real purpose of CA’s attempted subversion of the residents’ protections is based on CA’s refusal to disclose the annual compensation of all of its employees, as required by the Consumer Protection Act.

The CA attorney’s defense is, according to the letter, “that CA has enough protection for residents in its bylaws and other documents so that statutory protections are unnecessary.”  Didn’t we hear that in Twin Rivers where the NJ Supreme Court said homeowners were protected by the business judgment rule, so no need to get all riled about the loss of constitutional protections?

What is CA all about?  Howard County, MD contains the city of Columbia with its Columbia Association, a mega, mega, master association that resembles a large city rather than a subsection.  Its Pubic Information Guide refers to CA as

A nonprofit public benefit corporation” — which has no legal definition or standing — with “nine villages and Town Center are organized into 10 village community associations . . . . Each of Columbia’s nine villages and Town Center has a community association, which is an independent, incorporated, nonprofit civic association. 

 The Articles of Incorporation, along with the Covenants of the nine villages, provide CA with all of the rights, powers and authority it needs to carry out its purposes. The two documents empower CA to collect the annual charge and promulgate rules governing the use of facilities, the integrity of architecture and aesthetics, and so forth. The documents themselves can be consulted for further information. (Part II, How CA is Organized and How It Works).

 CA has a 2012 budget of over $67 million.

The way this private government works is that the HOAs are mandatory HOAs with covenants running with the land.  In their “Covenants,” CC&Rs for everybody else, there is the tie-in wording granting the non-profit corporation, CA, control over the HOA communities.  The HOAs elect representatives to the CA board.  It is similar to other master private governments.

Since all entities are private contractual arrangements, Columbia Association is an independent principality on the scale of the charter organizations of the 1600s through 1800s.  You may recall two of the most notable enterprises: The British East India Company (operating mainly in India) and the Dutch East India Company (controlled what is now known as Indonesia).

Here and now, CA makes use of the various subdivision HOA covenants running with the land, the CC&Rs, to entrap homeowners into bondage under their de facto but unrecognized private government.  And it has to resort to newspeak by referring to them as “villages” and the CC&Rs as “covenants.”

 

Insurer denies HOA coverage in Trayvon death

This position by the insurer points out that the HOA board is NOT 100% protected for wrongful acts.  Especially for those that are grossly negligent or intentional acts.

Homeowners should step outside the HOA attorney greated box that implies that the HOA can do no wrong, and remember that laws other than those HOA or Condo Acts  also apply to HOAs:  Restatement of Servitudes, tort law, and corporation law.

From the COURTHOUSE NEWS SERVICE Aug. 6, 2012

 

ORLANDO (CN) – Traveler’s Insurance sued Trayvon Martin’s mother and The Retreat at Twin Lakes Homeowners’ Association, where her son was killed, claiming it has no responsibility to defend the HOA or cover the teenager’s death.

Travelers Casualty and Surety Company of America sued The Retreat at Twin Lakes Homeowners’ Association and Sybrina Fulton, as representative of her son’s estate, in Federal Court.

The Retreat at Twin Lakes’ Neighborhood Watch captain George Zimmerman shot Trayvon Martin to death on Feb. 26. The shooting set off a national furor, as police initially let Martin’s killer, George Zimmerman, go free after questioning him. Martin was black; Zimmerman is not.

Travelers claims that on March 30, it issued the HOA a “claims-made, nonprofit management and organization liability insurance policy.

Fulton then sought monetary damages against the HOA’s policy with Travelers for her son’s death.

Travelers claims it is not liable because of the policy’s “wrongful act” exclusion.

Travelers claims the exclusion states:

“‘The insurer shall not liable to make any payment for loss in connection with any claim made against any of its insureds: 1) based upon, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving bodily injury, sickness, mental anguish, emotional distress, disease or death of a person, provided that this exclusion shall not apply to allegations of mental anguish or emotional distress if an only to the extent that such allegations are made as part of a claim for wrongful employment practices.’

“Travelers is in doubt of its rights under the policy and, by this petition, seeks a declaration of its rights and obligations with respect to the claim and demand made by Fulton upon Travelers and The Retreat at Twin Lakes as a result of the fatal shooting or Martin, and a finding by the court that under the above-referenced policy of insurance Travelers has no duty to indemnify or defend The Retreat at Twin Lakes in connection with the Fulton claim because coverage is precluded by the above exclusion.”

Zimmerman was rereleased on $1 million bond in August his first bond of $150,000 was revoked.

State Judge Kenneth Lester ordered Zimmerman back to jail after finding that Zimmerman and his wife Shellie misled the court about how much money they had.

Shellie Zimmerman was arrested and charged with perjury days later, and released on a $1,000 bond. She was to be arraigned July 31 but her attorney Kelly Sims filed a written not guilty plea.

George Zimmerman has pleaded not guilty to second-degree murder and claimed self-defense under Florida’s so-called “stand your ground law.”

Judge Lester last week refused to recuse himself after Zimmerman’s attorney Mark O’Mara asked him to. O’Mara accused Lest of making “gratuitous, disparaging remarks” when he set Zimmerman’s second bond, according to wire reports. Lester denied the motion as “legally insufficient.”

Insurer Says It Should Not Have to Pay for Trayvon Martin’s Death

HOA foreclosure ratio of 36 times violates the 14th Amendment against cruel and unusual punishment

Matt Tomsic wrote an important article in the Charleston Region Business Review on HOA foreclosures with some revealing statistics.  SPECIAL REPORT: YOUR HOME, THEIR RULES.  For example, 68% of the foreclosures were for $5,000 or less in Charleston County, SC.

I wrote the author for some additional statistics. What he had available was just median values for debt owed the HOA and home value, which were $4,500 and $160,000, respectively.

 

That amounts to a punishment of 36 times the debt owed. The US Supreme Court in State Farm v. Campbell, 538 U.S. 408 (2003) set criteria of punitive damages exceeding 10 times actual damages constitutes a violation of the 14th Amendment against cruel and unusual punishment. In the jargon of today, HOA foreclosure is the iconic instance of cruel and unusual punishment. And the HOA did not advance any hard cash like a bank to justify foreclosure rights.

 

BUT, your elected representatives see no evil and continue to support the real estate industry’s business interests, with the people being the pawns and “marks” in the con game.

Beware the folly of eliminating supermajority voting for amending the HOA CC&Rs

The latest drive by pro-HOA attorneys and lobbyists has been to seek legislation to do away with supermajority amendments to the CC&Rs.  If approved, the very foundation of majority rule in a democracy, and our long standing requirement that fundamental documents must have supermajority voting in order to be amended,  would be destroyed.  The argument is, Gee, because of the apathy, we can’t make important amendments to the CC&R.  

In the 2011 Arizona legislative session, HB 2441 was defeated at the last moment.  It would have allowed for minority – as low as 1/3 of the members — to amend the CC&Rs.  The CAI lobbyists fought hard for this bill, even telling the committee that although  it was governmental intrusion, the legislature always did that. 

Think for a moment.  If a minority can control the amendment process, it can control the HOA by enacting amendments that further strengthen the powers of the incumbent board.  Given the fact that the rogue boards are dominated by their HOA attorneys, minority control solidifies the political machines as the power elite. 

Think about it!  Under a political machine minority vote regime, the regime can eliminate all and every need for member approval, except, of course, voting for directors.  And, all future amendments will have this acceptable ground for the amendment — the apathy of the membership demands minority control.  Nobody cares, so what!

However, in spite of this persuasive argument, the infinite wisdom of the California legislature shines brightly when it enacted laws in the Davis-Stirling act permitting just such amendments as valid. Section 1356 addresses minority control of an HOA.  This section 1356 is an oxymoron and is an unreasonable and illogical intrusion on the private contract and to our fundamental belief in majority rule in a democracy.

Section 1356 allows for less than supermajorities where the governing documents require more to amend the governing documents.  So a 60% voting requirement would allow for minority control.  There is no restriction in the law on the lower limit for approval except to appeal to the judge that “this ain’t right.”  In other words, like the failed Arizona bill, 1/3 can be acceptable, and even a 20% requirement would be acceptable.

The lunacy of this law is that a majority voted amendment to reduce supermajority voting requirement is valid, if approved by a judge.  Go figure!  The law has circumvented the CC&Rs private contract putting the cart before the horse!  That the members have spoken is the basis for this requirement, in spite of evidence of psychological indoctrination to obey and legal pressures of financial harm for not obeying. (See Why do people harm others in HOAs?)

But if a supermajority was needed, as currently required by the CC&Rs, the amendment to amend before the court would fail. I mean, isn’t that why the HOA is before the court?  They can’t get anything done with a supermajority! 

How to get a supermajority vote?  It’s done every day, everywhere.  The content and need for the amendment must be conveyed to the membership in an open forum, an open meeting, and be debated before the membership.  And not in some one-on-one private meetings or phone calls. 

There is no requirement in the law to hold an open meeting of the membership to debate the amendment before approving the elimination of supermajority voting.  A requirement that is found in all legislative and state agency rule-making procedures – public input.

 

In the recent court opinion (Quail Lakes Owners Assn. v. Kozina (2012) 204 Cal.App.4th 1132), the homeowner does not challenge the validity of this law, but advances procedural arguments under the law.  That was a big mistake (he lost), as I’ve repeated argued, of not seeing the ugly forest through the trees. The mandatory requirement under § 1356(c)(5), that “the amendment is reasonable” was never argued as I’ve argued above.  In fact, my arguments above were made loudly and clearly in defeating Arizona’s HB2144, and that defeat went to the very last vote.

This decision is another example of bad law becoming a detrimental precedent against homeowners.  If you think you have problems now, wait until your HOA blindly obeys the board and allows for  a minority controlled HOA.

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