Tag: linkedin

Do homeowner regulations go too far?

  So his homeowners association levied fine after fine and put a lien on his home though he’d coughed up nearly $50,000 to pay fines and other related costs. Eventually, his home was foreclosed because Darius still owed $24,591.

On Aug. 15 – after losing his one-story home and two days before he would be evicted – Darius’ next door neighbor heard an explosion about 2:20 a.m. Patti McCallister ran outside, saw Darius’ home burning and called 911.

Firefighters found Darius’ badly burned body lying on the floor of his living room in the back of his home.

Do homeowner regulations go too far?     By Matt Tomsic
Matt.Tomsic@StarNewsOnline.com

Sep 3, 2010

 

My Reply:  

HOAs will continue to have serious problems because:

1.  They are based on an  undemocratic authoritarian legal scheme that does NOT place the individual rights and freedoms of the members first, as does our Constitution, but the monetary goal of maintaining property values.

2.   Consequently, this un-American private government  exists outside the Constitution and its protections of the people.  All the legal court battles are attempts to restore those lost rights.

3.   The misleading claims of agreement by homeowners is superficial and would not stand up to judicial scrutiny for the valid surrender of one’s rights.  The mere filing of CC&Rs with the county clerk is sufficient to legally bind lot owners, sight unseen, and is a mockery of both Constitutional and contract law.

4.  Then there is the unspoken alliance of local governments, state legislatures, consumer protection agencies, and public interest firms who shout “individual rights” and “no government interference”, but see no problem with private government interference.  And that also includes CAI.

5.   Community Associations Institute (CAI) was formed back in 1973 to address these problems with the HOA legal scheme, yet these problems continue to exist in spite of all that “education” provided for board members, managers, and legislators.  Would you hire a training firm with that record?  State and local governments seem not have a problem and hire “the failure to get results” CAI.

6.   CAI is on record in its amicus brief to the NJ appellate court in the Twin Rivers case, cautioning the court about the “unwise extension of constitutional protections to homeowners” in HOAs.   The common law synopsis of court decisions regarding covenants takes a decided editorial opinion rather than a neutral summary of the cases when it states, for example, that if there’s a difference between servitudes law (covenants) and constitutional law, servitudes law should apply (§ 3.1, comment h).

6.  The media, even in this article, takes the premise and presumption that the  HOA unquestionably has the right to act, and that its motives are pure and for the benefit of the community.  None of the above substantive issues are ever delved into.

In order to avoid another 40-odd years of continued injustice and discontent, government authorities and legislatures must address the above issue of substance, and stop their participation in the unspoken alliance of “No negatives about HOAs”.

HOAs in the punishment business

I have argued that the HOA is in the punishment and intimidation business, especially with respect to foreclosure “damages”  and fines under failed due process procedures —  the kangaroo courts.  Here’s a recent NJ case that addresses penalties as a punishment.  In this instance, the HOA had a covenant that granted it the right to access a flat 20% charge as liquidated damages rather than attempting to determine just what were the actual damages incurred by the HOA.

Let me clarify.  When seeking damages, the damaged party must submit to the court the actual damages it incurred.  For example, what are the damages to the HOA if your grass height violated the arbitrary rule for well kept lawns?  Or you painted an unapproved house color?  Anybody?  Well, that gets down to simply attorney fees and court costs of which the HOA sees nada.  That’s why there are no actual damages to the HOA itself submitted by the HOA.  So, are these actions by the HOA really a punishment rather than a recovering  of damages inflicted on it by the homeowner?  Hell yes!

The NJ opinion contained,

As we have previously noted, the 20% payment was not “interest.” It constituted a liquidated damages provision established in the By-laws of the Association in lieu of an assessment of counsel fees in instances in which legal action on the Association’s behalf was required.

A clause is a liquidated damages provision if the actual damages from a breach are difficult to measure and the stipulated amount of damages is “a reasonable forecast of the provable injury resulting from [the] breach.  Such clauses are deemed “presumptively reasonable” and therefore enforceable, and “the party challenging [a stipulated damages provision] should bear the burden of proving its unreasonableness.”  Because the harm is necessarily incapable of accurate estimate, “`reasonableness’ emerges as the standard for deciding the validity of stipulated damages clauses.  The amount fixed is unreasonable if it serves not as a pre-estimate of probable actual damages, but rather as “punishment,” grossly disproportionate to the actual harm sustained.

We are certain that if counsel submitted an accounting of the time required to prepare for and conduct the two-day trial held in this matter, the resultant counsel fees would have been substantially higher. However, as the result of the By-laws, the Association has waived the right to that higher award.

Mazdabrook Commons HOA v. Khan, No. A-6106-08T3, (N.J. App.,  Sep. 1, 2010).

That about says it all when a $200,000 home is lost for a $2,000 fine, plus $3,000 in attorney fees.  The homeowner loses everything after building up his equity over 10 -30 years.  This ratio of 40 times the $5,000 is far in excess of the 10 times standard set by the US Supreme Court for punitive damages in product liability cases.  And yet, the HOA had not been damaged as it had not lost a penny of its own! 

It’s called punishment, pure and simple!  How else can an authoritarian regime like an HOA obtain obedience and acceptance of its rules and regulations (“laws”)?

Note that the attorney has no say in the matter, because unlike its erroneous attitude — you owe me $nnn in fees  — in all those dunning letters, it is not a party in the issue, but just a hired hand of the HOA.  So, why are HOAs being so nice to attorneys?  They undoubtedly agree with the attorney that how else can they coerce compliance except through  punishment?  And if lawyers refuse employment because the fees are so low, no coercion.

And, while we are at it,  doesn’t a flat fee of even 20% sound nice?   The above $2,000 foreclosure amount would cost only an extra $400 and not $3,000 to the attorney.  Now that sounds like a leveling of the playing field without HOA attorney fee churning — we need to make a living — obstructing  justice.

The Unspoken Alliance: “No negatives about HOAs”

The Arizona Republic ran the article, HOA, Laveen man fight over historic flag. 

The HOA called the flag debris and said it broke neighborhood rules.. . . The flag’s a favorite emblem for the ‘tea party”‘movement.

 Reply Comment:

This is a solid First Amendment violation of the right to speak freely on politcal matters.  Supreme Court has upheld such rights. Any deed restriction or covenant that is against public policy or is unconstitutional is invalid and unenforceable. Long held law, thank goodness!

Now, you would think that the HOA attorney, Delgado. another member of the CAI law firm of Carpenter Hazlewood, would know that.  Wouldn’t you think so?   It is interesting that the media always fails to mention this affiliation with CAI, as many of these attorneys lecture on how to live happily in an HOA.  And they are supported by your local town government through the HOA Academy and Leadership Centre programs. 

Are the media and local supporting governments part of the unspoken alliance of, “No negatives about HOAs”?  

How about your Attorney General?  Your consumer protection agencies?  Your real estate department?  The Realtors?  Heard or read anything of substance against HOAs?  Gee, maybe I’m delusional and there are no serious issues of substance after all.

HOAs vs. local government — which “laws” control?

In the  Aug. 6, 2010 Carpenter Hazlewood (CAI attorneys, AZ) e-newsletter post, “Deed Restrictions versus City and County Ordinances: Which One Controls,”   attorney Nkita Patel wrote,

“In sum, if there is a conflict between the association’s CC&Rs and a city or county ordinance, the more restrictive provision will govern.”  

The underlying rationale is that the homeowner, upon taking possession of his deed, has agreed to every surrender of his rights.  And people can agree to the surrender of their rights.  But, under what circimstances and conditions?  Under servitude law of covenants, the homeowner need not read nor sign his explict consent to the surrender of his rights. But, this justification, by itself, is a violation of not only contract law, but of constitutional law and the owner’s due process rights.  Even The Restatement of Servitudes, §3.1, holds that an unconstitutional covenant is invalid.  What say you, Ms. Patel?  

Furthermore, what say you if the covenant simply says, ineffect, “No parking on the streets or driveway?”   Here, regarding public streets, the ordinance says, “No parking 8:00PM to 6:00AM.”  Which is more restrictive?  Which “political law” controls?   

And, finally, the “usual advice” statements are offered, where only partial answers are provided —  those favoring the HOA and NOT explaining how the law would apply as to circumstances favorable to the homeowner.  Carpenter Hazlewood has never addresed the issue of guest parking and the wrongful holding a member in violation of the CC&Rs in an egregious violation of the law, good faith treatment of members, and a just and fair governance. 

What say you, Ms. Patel, about the HOA’s actions in these circumstances?  Please see Wigwam Creek North HOA v. Fuchs, CC: 2010- 49644, Estrella Justice Court, where such an event and wrongful HOA act took place, apparently with HOA attorney approval.

 

Read more . . .

HOA attorney collusion and regulation of public streets

Ethical obligations of attorneys to HOA members

 

HOA resident applicant questionnaire

I received an email the other day asking for my expert opinion on a proposed application questionnaire for HOA renters.  I replied by asking if the questionnaire would apply to buyers, also, to which the emailer responded, Yes.  Here are the areas of concern as to what should be asked of applicants:

1) Requiring a stated income level (i.e., $30,000, $50,000, $70,000 and so on):

2) Requiring last two year’s tax returns:

3) Please comment on credit score section (Page 1, #3):

4) Please comment on 30-day completion time:

5) Please comment on personal interview by board of directors:

6) Please comment on statement concerning “board’s decision will be final and no reason will be given (i.e., denial).” This statement is immediately above signature line on Page 4:

I responded with:

Adopting such an approach would befit an exclusive community — for those few good men, and women.  It would probably reduce the desirability for the general public, but may attract the few.  It would also hurt sales by existing owners. I believe the promoters of planned communities going back to the gitgo knew that HOAs were not for everybody, but they were interested in the  mass merchandising of HOAs to everyone.

Financial status was already checked by the mortgage insurers, so it buys the HOA very little in any greater protection.   Maybe in regard to getting some assets from the unethical, in my onion, foreclosure auctions. 

However, it will allow a people to people discussion to get a better “feel” for one another.  But, then again, only half the story would be told, since there does exist this unspoken alliance of “No Negatives About HOAs.”  For example, would the board be willing to say to prospective members, “You understand that your home will be collateral for the survival of the HOA?”

It would be interesting to know how this approach plays out.