Tag: linkedin

HOAs as an institution and its impact on society

The common definition of “institution”, for our purpose, is “ a custom, practice, relationship, or behavioral pattern of importance in the life of a community or society”, or  “an established custom, law, or relationship in a society or community.”   The degree or strength of the acceptance of the established custom or behavior pattern often results in the perception that the institution is a concrete and indestructible reality, and not dependent on one’s belief or acceptance of the  institution.  For example, marriage is an institution that has been losing its acceptance in recent time.  

The definition of an institution well applies to planned communities and homeowners associations.  As a result of the failure over 47 years to mount substantial opposition, homeowners associations have become an American institution, an accepted  way of life.  While there were “spots” of protest and informed communication over the years, it was the accumulated effect of the national lobbying organization, CAI, supported by real estate and land usage legal-academic aristocrats writing in their journals and speaking at conferences, that brought about the institutionalization of HOAs.  Homeowners associations  have become accepted as a way of life in our society and culture, and thoroughy ingrained into our society. 

Consequently, it does not come as a surprise that any substantial opposition, such as my commentaries and citations of authorities, is met with disbelief. This is normal human behavior, which occurs with any idea or facts that are contrary to one’s long term beliefs and values.  This is the effect of institutionalization.  

When confronted with facts and hard evidence to the contrary of these long held beliefs, the normal reaction is a defense of the long held belief.  After all, many aspects of one’s life are tied to one’s beliefs and values, and they cannot be dismissed out of hand.  The common reactions are:  You are crazy! You don’t know what you are talking about!  You’re a weirdo!  A radical!  The reaction is to ignore any evidence to the contrary. 

The stronger the belief, the more reactionary is the response to contradictory information.  Defensive arguments offered to retain the long held belief can rise to highly illogical and absurd defenses.  Even legislators are not immune to this aspect of human nature.  Such is the effect of institutionalization on society.   

HOAs became part of our society with the help of the special interests who did not speak, and continue not to speak, of any negatives about homeowners associations in America.  The unspoken alliance of “no negatives” has been thoroughly ingrained into our elected officials, the media, and the public at large.  Just a natural consequence of the institutionalization process.  But, an institution does not automatically carry the stamp of being ethical, moral or just.  Slavery was once an American institution.  Established practices and behavioral patterns just reflect the mindset and values held by a large majority of the society, and we well know societies can go awry from time to time.   

The only rehabilitation therapy is the continued and repeated exposure to the facts, and I mean facts backed by hard evidence, legal authority, and confronting those seeking to maintain the institution’s continued existence in our society.  Such as, presenting the other side of the issue at hand, which, as we know, was often purely propaganda and not the full truth.  (A good example would be the HOA Academy backed by a number of Arizona towns that does not inform HOA members of their limited rights when a suit is brought by their HOA, or provide information about the statutes and the demanding nature of legal Rules of Procedure). 

In time, either the established institution is now seen in a a different and unfavorable light, or society becomes divisive with the supporters taking dogmatic ideological positions, resorting to, essentially, an “I don’t care” rationale.  

De facto NJ private HOA governments granted liability immunity

While reading the NJ Superior Court case, Fernicola v. Pheasant Run HOA[i],  I was surprised to find that New Jersey statutes grant an HOA greater immunity than granted to public entities.  In this case, a homeowner was injured as a result of tripping on an uneven section of common ground sidewalk.  One adjacent slab was 2 inches  above the other, of which the HOA was well aware.  But, this was just one such incidence of an  uneven sidewalk.    The HOA was not found guilty of gross negligence.

Negligence is a wrong under a duty of care doctrine, to which  HOAs and public governments are held accountable.  In short, from my lay knowledge of the law, a complaint must show that a duty of care existed, and that the accused violated that duty resulting in damage to another caused by this failure of care.   In general, public entities are granted either absolute or partial immunity from such liability[ii], under the logic that who would work for the government if all employees were made liable for their actions.   Apparently, to even a higher degree of protection,  this logic was applied to  de facto, private, contractual government HOAs.

Following is the appropriate section of the N.J. statutes.  Note that, once again, the law defers to, and makes legal, privately drafted contractual provisions. The presumption is that all members to these CC&R servitude contracts agreed to each and every surrender of rights and protections.  Note, too, the deliberately awkward wording of subsection (b), which obscures the fact that the HOA has immunity except from any of the enumerated factors.  N.J.S.A. 2A:62A-13 provides as follows:

a. Where the bylaws of a qualified common interest community specifically so provide, the association shall not be liable in any civil action brought by or on behalf of a unit owner to respond in damages as a result of bodily injury to the unit owner occurring on the premises of the qualified interest community.

b. Nothing in this act shall be deemed to grant immunity to any association causing bodily injury to the unit owner on the premises of the qualified common interest community by its willful, wanton or grossly negligent act of commission of omission.

Under real property tort law liability[iii], there are three categories of a duty of care toward others by property owners.  We would expect this common law doctrine to apply to HOAs were it not for special laws for private organizations.  Under tort law, there is not duty of care for trespassers — they enter at their own risk.  Licensees are people you invite on to your property, such as social guests.  With this class, the owner must only inform of conditions that he is aware of. The last class, Invitees are those whom the owner invites on to the property to conduct business, or that has public services, such as a public phone, etc.  The owner has a duty to inspect and to  inform this class of people of any situations that might prove harmful, such as faulty construction, etc.  However, given the above special statute, the HOA has almost no accountability to its member-owners; they would get a better deal from belonging to de jure public government.

IT SHOULD BE CLEARLY UNDERSTOOD that these grants of special privileges to private organizations, as the various state HOA and condo laws can be described, occur without any justifications or consideration being offered to the homeowners as to enhanced rights to deal with any abuse of these special grants.

AND LET US NOT FORGET the wisdom of the NJ Supreme Court in Twin Rivers[iv] that homeowners are protected by the business judgment rule, and not to worry about constitutional protections.  The Court failed to note the this rule was also designed to protect the HOA entity and not the people from abuse, in contradiction to the principles found in the Constitution and Bill of Rights.

 

Notes

[i] Fernicola v. Pheasant Run HOA, No. A-2027-08T1, N.J. Super. App. Div., July 2, 2010.

[ii] Under the Federal Tort Claims Act, the government can be sued for negligent acts or omissions that need not rise to the level of willful or gross negligence. See Tort Law for Legal Assistants, Linda L. & J. Stanley Edwards, eds. p. 218 0 219(Thomsom-Delmar Learning, 3rd ed. 2004).

[iii] Id, p. 86-88.

[iv] See generally A choice for Americans: the US Constitution or authoritarian, private HOA government.

HOA made no attempt to contact soldier in Iraq before foreclosing

As a followup to the Bogcritics article, While Fighting in Iraq, Soldier Loses Home to HOA,  a June 27th article appeared in the Telegraph Herald (Dubuque, IA), reporting that the Heritage Lakes HOA has hired a PR firm to address all the publicity stemming from this foreclosure.  In short, in dispute are the HOA claims that the assessments were owed before going on duty and when Clauer was on active duty,  and that they never knew he was on active duty.  Clauer’s attorney replied that they never even attempted to call him.

 Not addressing the claims and counterclaims, and adding to the justification for HOAs having the right to foreclose, I wrote in my HOA Constitutional Government commentary, “CAI attorney advises negotiate payments in HOA short sales“,

 I have written repeatedly about the short-sighted, self-defeating, hardnosed position that the HOA does not negotiate and does not give in one inch.  That posture stems from the great fear of a slippery-slope path to a loss in absolute power over homeowners — it would be a seen as a sign of weakness.  How true that is — asking the HOA to face reality rather than to foreclose themselves out of business as the CAI lawyers have been exhorting HOAs to do over the years.

 

And this attitude is reflected in the actions by the Heritage Lakes HOA — we don’t gotta do nuthin’, cause we have the power.

See also the May 2007, Memorial Day: American soldiers are defending a New America, one without democratic protections.

CAI attorney advises negotiate payments in HOA short sales

Arizona’s Ekmark & Ekmark (CAI/CCAL member) has joined the blog world.  It’s chosen vehicle is a Bog provider called Posterous, and his blog is simply http://ekmark.posterous.com — easily confused with preposterous. 

 In its blog, advice is given to HOA boards to be realistic and negotiate for partial payments of debts, as any other organization would do when facing financial problems with a small chance of getting any money out of debtors.  In short sales situations, Ekmark informs the HOA that it must act quickly to get at least some money out of a losing situation, even though it is complicated negotiating process.

 I have written repeatedly about the short-sighted, self-defeating, hardnosed position that the HOA does not negotiate and does not give in one inch.  That posture stems from the great fear of a slippery-slope path to a loss in absolute power over homeowners — it would be a seen as a sign of weakness.  How true that is — asking the HOA to face reality rather than to foreclose themselves out of business as the CAI lawyers have been exhorting HOAs to do over the years. 

 And by the way, what about all that abdication to the HOA attorney to run up attorney fees on homeowners facing financial problems, rather than advising the board to sit and negotiate a sensible payment plan?  What advice can be given HOA boards on how to negotiate a plan.  A failure to undertake this effort would raise questions as to the real intent of the above advice on accepting partial payments. A person may get the feeling that it’s just another attempt to keep at least a part of the attorney fees coming in, since these fees are generally the bulk of the money owed by the homeowner.  And they don’t go to help the HOA!  Don’t you think HOA attorneys should cut their fees, and help be a good corporate citizen?

 What do you say CAI attorneys?   What does your corporate conscience have to say?

 NOW that I’ve said the above,  let us not forget that the HOA has no legal standing in the lender/mortgage contract.  There’s really no reason for the lender to give away even more of its money in this short sale transaction.  The homeowner may still be personally obligated to the HOA for its past debts, but that’s no concern of the lender, is it? So why would it even care about the HOA’s attempt to negotiate a piece of the action?   And if the homeowner attempts to bargain for a larger piece of the pie to payoff the HOA, even partially, he risks losing the short sale.

 No, it appears once again that the CAI attorneys are silently ascribing de jure public government attributes as if the HOA assessments were indeed equivalent to taxes.  You know, taxes must be paid!  But, the HOA is not a recognized legal form of civil government.  It cannot claim such attributes; it cannot demand payment of assessments from the short sale.  Especially without even offering to be bound to the 14th Amendment as all public entities are subject. 

 So, I ask, what is the real motivation behind this interference into short sales advice?

Does CAI act in good faith for the benefit of the people in HOAs?

Arizona’s Augustus Shaw IV, only recently joining CAI’s College of Community Association Lawyers, was enjoined from running for state representative by a Maricopa superior court decision.  Shaw was found to live in District 20, but wanted to run in District 17, and having given a number of justifications for living in District 17 as opposed to District 20.   Now, it should be quite simple, even if you are not a lawyer, to know where one really lives, unless you are looking “to pull a fast one.”  See the Minute Entry, http://www.courtminutes.maricopa.gov/docs/Civil/062010/m4270712.pdf. 

Is this the caliber of membership in CAI’s self-proclaimed lawyer’s “honor” association?    What will CAI do, since it has a code of ethics, supposedly both for  members and a CCAL members?  I have not seen any evidence or documentation in my 10 years of watching CAI that any action was brought against a member or a CCAL member for violations of the respective codes of ethics

And what about those state legislatures and town councils that employ CAI as the official educator of HOA boards and property managers?  What will they do?  They should be watching for a strong indication that CAI  removes members not of good character and standing, and who display unethical conduct, especially if they are a lawyer.  Why?  Because state legislators have operated under a mistaken presumption that HOA boards will conduct themselves in good faith and obey the laws  —  even without any threat of punishment. 

But, the record repeatedly shows otherwise.  Abusive HOA boards ignore the laws knowing that homeowners will not go to court against the experienced HOA/CAI attorneys.  CAI, that powerful national lobbying trade group, has claimed over the years, before the legislators, that they speak for the homeowners, and what CAI argues is also what the homeowners want.  But, we know better.  Do you really think a homeowner wants his home as collateral for the survival of the HOA?  Or really agrees to being foreclosed on for a mere $200?  Or willing surrenders his right to due process in favor of HOA kangaroo courts?  Get real, legislators!  Get real! 

CAI proposes and supports HOA laws for its own self interest and does not deal in good faith.  The CAI attorneys act as hardnosed defense councils against the homeowner, and do not recognize a fiduciary obligation to the owners of the HOA, the homeowners.  They see it purely as a management vs. employee relationship, and they are on the management side.  CAI does not see, nor does it want ever to admit to any de facto government status, that the HOA is an authoritarian form of political government and an anathema to our democratic system of government. 

If CAI is really acting in good faith for the benefit of the people living in  HOA territories, it will seek the dismissal of Augustus Shaw from its CCAL.