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Dysfunctional legislatures supporting de facto private HOA second governments

 

“Wherever the real power in a Government lies, there is the danger of oppression.”   James Madison.

In my prior commentaries[1] on Arizona’s constitutional question of “who controls public streets”, HB 2153, I spoke of “legitimate governments” and made it quite clear that a contractual, private de facto government — an HOA — cannot be held to be legitimate.   The homeowner associations government  is chartered not under the statutes and constitution that govern de jure, legitimate, public entities, but is chartered under corporation law. Where corporate law is applied in an uneven manner and subservient to the common laws of equitable servitudes.  And where servitude law has been upheld by the courts and recommended as the controlling body of law when in conflict with constitutional law. 

It appears my arguments, mainly borrowed from legal documents and constitutional scholars, against the private government HOA control of public streets has failed to bring legislative leaders to their senses.  Any actions not in support of, or failures to act in support of,  the supreme law of the land and the laws and Arizona Constitution does, in itself, raise questions of the legitimacy of our state government.  And of the consent and obedience in conscience to be bound by any such laws or “commands” of the legislature. In a very practical and real manner, it is a question of the legitimacy of the actions of the legislative leaders who are members of the majority party that controls the legislature in Arizona — the Republican Party. 

Constitutional scholar Randy Barnett speaks about legitimacy, consent to be governed, and obedience[2]: 

Only if it is legitimate can an existing constitutional system issue commands to the citizenry that bind individuals in conscience. Consent legitimates lawmaking only on the assumption that individuals have rights and there are things no person or group can do to them without violating their rights.  For a law is just, and therefore binding in conscience, if its restrictions are (1) necessary to protect the rights of others and (2) proper insofar as they do not violate the preexisting rights of the persons on whom they are imposed.

Though actual consent [100% consent of the governed] can justify restrictions on freedom, without actual consent [or majority rule], liberty must be strictly protected. In the absence of actual consent, a legitimate lawmaking process is one that provides adequate assurances that the laws it validates are just in this respect.

“If angels were to govern men, neither external nor internal controls on government would be necessary.”  James Madison.

For an unspoken reason, the Senate leadership appears set on withholding HB 2153 from a vote by the people’s representatives.  Having already passed the House, I cannot envision any justification for holding this bill, for this willingness to abdicate legislative powers and authorities to private, contractual organizations. Organizations whose “constitution” obtains it power over the people within the subdivision, not by constitutional law, but by the common law of equitable servitudes.  This failure to hold a vote in the GOV committee sends the message, “who needs the Constitution”?  It is a repudiation of the Constitution that legislators are obligated to uphold.  It reveals a dysfunctional legislature, as we witness on the national level in Congress, reflecting a divisive ideology as author Brownstein describes in The Second Civil War[3]: 

The political system has evolved to a point where the vast majority of elected officials in each party feel comfortable only in advancing ideas acceptable to their core supporters. . . . The political system now rewards ideology over pragmatism. . . . What’s unusual now is that the political system is more polarized than the country. Rather than reducing the level of conflict [the legislature] increases it.

 
The Constitution does not permit a second, private, form of political government in America!

Let HB 2153 be heard in the GOV committee, and passed on to the full Senate!

References

1.  In general, see  HOA Private Government (http://starman.com/HOAGOV).  See also, Guest Opinion,  Government of the people, by the people, for the HOA, William M. Brown (internet commentary).

2.  Randy E. Barnett, Restoring the Lost Constitution: The Presumption of Liberty (Princeton University Press, 2004).

3.  Ronald Brownstein, The Second Ciivl War: How Extreme Partisanship Has Paralyzed Washington and Polarized America (Penguin Books 2007).

 

 

Government of the people, by the people, for the HOA

 

The following email letter from Mr. Brown to the Arizona legislative leaders reflects his concern about democracy in America.  (For more information on this HOA bill, please see public streets: the battleground for private or public government control).   

hoa constitution
hoa constitution

My dear President Burns, Chairman Tibshraeny, Vice-Chairman Harper, Members of the Senate Government Institutions Committee, Senator Bunch, Representative Barto, Co-Sponsors of HB2153 and Representative Barnes:

“From time to time we read in the newspapers, or hear on the radio, about policies and procedures and practices in the Arizona legislature. Most often that which we read or head is critical of how the legislature goes about its business. Words such as “fair” and “open” and “level playing field” are used, as if to imply that the legislature should operate in a significantly different manner that it does.” Senator Randall Gnant, “From Idea…..To Bill…..To Law, The Legislative Process in Arizona,” February 2000

The Guest Opinion, “Who controls public streets,” Arizona Capitol Times, April 1, 2010, is on-point re the proposed HB2153 legislation as well as the global issues respecting associations’ control of property not owned by an association, associations’ control of the conduct and actions of Arizona citizens clearly not subject to the association’s governing documents and associations’ coveted power and dominion over homeowners subject to the association’s governing documents, the sacrosanct “private contract.”

Association stakeholders opposed to HB2153 regularly blur the lines between their long-held belief in “private contracts” not to be interfered with by federal, state, county and/or municipal governments and certainly not the legislature unless and until it suits the stakeholders and their client associations’ interests as evidenced by associations’ growing reliance on “what can government do for” stakeholders and associations today. (See Community Resource, Issue 1 / 2010, “What Your Local Government Can Do For You,” Community Associations Institute / Central Arizona Chapter, attached)

“Getting a hearing on a bill is a crucial first step for individual citizens, lobbyists, special interest groups and state agencies..in the Senate, bills that receive a hearing have a high likelihood of passing the full Senate. So, while failure to secure a hearing is a virtual disaster for a bill, getting a hearing takes a bill on the longest step towards becoming law.” (Gnant)

Please include HB2153 on the Committee On Government Institutions’ agenda, Consideration of Bills, permitting the peoples’ representatives in the Senate to vote on the bill’s passage as your brethren in the House, the people’s other representatives, did so on February 17, 2010 (43/14/03).

Respectfully,

William M. Brown

Is the delegation of legislative authority to private HOA entities constitutional?

When it comes to delegating governmental power and authority to state agencies, one only needs to look at the body of law surrounding the grant of authority to a state agency.  The authority for an agency to make and to enforce laws, under the state’s Administrative Procedures Act,  is subject to constitutional law with its requirements and prohibitions.

Please note that, in Arizona, the pro-HOA national lobbying organization (Carpenter Hazlewood law firm) managed to have the Office of Administrative Hearngs (OAH), a state agency, adjudication of HOA disputes declared unconstitutional, thereby depriving homeowners of their only just hearings of disputes, of due process of law. OAH resulted in 42%  of the cases being won by the Pro Per homeowner against the HOA and its attorney.  This alone speaks for the abysmal failure of HOA private governments to operate in a just and fair mode.

Understanding the above, the question arises as to the legitimate grant of governmental powers and authorities to private organizations. While not officially recognized as a de jure (under law) government, the various state HOA statute and “Acts” do grant authority to these private governments to act independent of the state laws and local ordinances.  And many times in many states, these private government arrangements, not approved or subject to review by the state,  are sometimes held superior to or supplement state laws (as when we see with, “unless otherwise provided in the governing documents”). 

The following legal doctrine and holdings apply to any private organization, and not specifically to the HOA, making any defense with respect to not being a mini-government irrelevant.

Under the “delegation doctrine”,  tests of the constitutionality of the delegation of legislative authority took place during the New Deal era of the 1930s.  With respect to the Bituminous Coal Conservation Act of 1935, private businesses were allowed to set standards and rates. Struck down because “the setting of requirements by private producers was an unconstitutional delegation of legislative power to private persons.”[i]  And in Schechter Poultry (1935), the Supreme Court held the National Industrial Recover Act to be “delegation in its most obnoxious form”, as it is “delegation to private persons whose interests may be and often are adverse to the interests of others in the same business.”[ii] 

In more recent times,  a private group controlling its competitors would not be considered an excessive delegation issue, but perhaps a procedural due process issue. The question to be answered is: Are the competitors “being deprived of due process by being subject to the will of entities with interests contrary to theirs?“[iii]  This question of delegation to private organizations can be summarized as follows,

While delegations to private organizations may be suspect, they are by no means inappropriate. . . . where delegations in limited and technical areas  . . . are quit useful  [e.g. in setting technical standards and codes for health and safety concerns].  The legitimacy of this course will, however, turn on whether these standards have been formulated by private groups that are  so constituted as to dampen special interests and whether these standards involve limited and technical areas as opposed to broad matters of public interest.[iv]

 

And in particular relevance to the setting of zoning ordinances, we have Eubank v. Richmond, 226 U.S. 137 (1912) and Eastlake v. Forest City Entr., Inc., 426 U.S. 668 (1976) where private parties were  denied the right to set zoning ordinances.  Consequently, the setting of public street parking ordinances by HOAs as private entities, for example, would be an unconstitutional delegation of legislative authority.  And by virtue of the Restatement of Servitudes, § 3.1, Validity of Covenants, any such HOA covenant would be viewed as contrary to public policy and unconstitutional as well.  (See my public statement to the Government Committee).

The pro-HOA supporters object to the above reality and argue that the homeowner voluntarily, knowingly and freely 1) agreed to be bound by the CC&Rs, and 2) to the surrender and/or waiver of his rights and freedoms when he took possession to his deed under servitudes law.  My reply, as I argue my public statement to the Government Committee, is a resounding not so!

Furthermore, the CAI national pro-HOA lobbying group and the “true believer” HOA supporters would have you believe that the HOA is just another nonprofit organization, and like these other nonprofits it’s allowed to set rules and regs, issue fines, withhold benefits in terms of privileges and access to amenities, etc.   But, where can you find another private organization whose governing documents are just about echoed by statute, thereby giving the illusion of legitimacy?  I submit that if indeed another organization can be found that controls and regulates the inhabitants within a territory, then it will be functioning as a de facto private government, or an unincorporated town or village under the municipality laws of this state.

The bona fide government interest to create a better community under local government authority and control, a form of “home rule”, be achieved today under the state’s special taxing district laws. All the private amenities, community ordinances (“rules and regs”), taxes (assessments), and enforcement rights are all doable under special taxing district laws.   What would be gained is the accountability of the district to the laws, ordinances and constitution laws to which all other forms of political government are held.  No more special laws and no more special treatment for HOAs.

Enabling HB2153 to become law will serve to draw a line in the ground.  A line directed at the HOA not to pass.

OHIO SB 187 establishes HOAs as superior to state law

The Ohio Planned Community bill, SB 187, establishes and supports the homeowners assocation second form of American local political government, an authoritarian private government that repudiates the US Constitution and the principles of democratic government.

Sec. 5312.15. In the event of a specific conflict between this chapter and express requirements or restrictions in such a governing document, the governing document shall control.

HOAs are de facto governments unrecognized as de jure governments as a result of such laws as the Ohio Planned Community Law, rather than being established and delegated powers and authority under the municipality laws of state, yet are very much functioning governments like Cuba, which is unrecognized by this country.  Ask anyone living in an HOA if the HOA is not an authoritarian government.

 
Read the following excerpts expressing  1) the violations of democratic rule by the members, 2) inadequate due process as required under the law of not only a hearing, but adjudication by an independent tribunal, with witnesses and evidence allowed, 3) violations of open meeting laws, and 4) the lack of “public” disclosure of enforcement activities and procedures, all of which your public government would not be allowed to get a way with.
 
 
Ohio Planned Community Law (excerpts)  http://www.legislature.state.oh.us/bills.cfm?ID=128_SB_187
  
Sec. 5312.03.
(C)(1) If provided in the declaration, a declarant may control the owners association for the period of time the declaration specifies. During the time of declarant control, the declarant or the declarant’s designee may appoint and remove the members of the board. The period of declarant control shall terminate not later than the time at which all of the lots have been transferred to owners.

(2) Not later than the termination of any period of declarant control, the owners shall elect a board of directors comprised of the number of members the declaration or bylaws specify.

Sec. 5312.04.
(B) A board may act in all instances on behalf of an association unless otherwise provided in this chapter, the declaration, or bylaws.
 
C) Except during a period of declarant control, the board shall call a meeting of the owners association at least once each year.
 
(F) No owner other than a director may attend or participate in any discussion or deliberation of a meeting of the board of directors unless the board expressly authorizes that owner to attend or participate.
(G) . . . . No private right of action additional to those conferred by the applicable state and federal anti-discrimination laws is conferred on any aggrieved individual by the preceding sentence.
 

Sec. 5312.15.  In the event of a specific conflict between this chapter and express requirements or restrictions in such a governing document, the governing document shall control. This chapter shall control if any governing document is silent with respect to any provision of this chapter.
 

Sec. 5312.05. (A) Unless otherwise specified in the declaration or bylaws, the owners may amend the declaration and bylaws by the consent of seventy-five per cent of the owners, either in writing or in a meeting called for that purpose. No amendment to the declaration or bylaws is effective until filed in the office of the county recorder.

(B) A vote to terminate the applicability of the declaration and to dissolve the planned community requires the unanimous consent of owners.
 
 
Sec. 5312.07.
(B)(4) Information that relates to the enforcement of the declaration, bylaws, or rules of the owners association against other owners; [a denial of HOA records]
 
Sec. 5312.11.
(D)(1) To request a hearing, the owner shall deliver a written notice to the board not later than the tenth day after receiving the notice this division requires.
 
 
Sec. 5312.13. All owners, residents, tenants, and other persons lawfully in possession and control of any part of an ownership interest shall comply with any covenant, condition, and restriction set forth in any recorded document to which they are subject, and with the bylaws and the rules of the owners association, as lawfully amended.

 

"This is not Mayberry anymore" as mayor supports HOA usurpation of city's legitmate authority

Excerpts from my response to the advocacy for HOA governments by the Mayor of Glendale, AZ : —

I thought that the regulation of public streets was under the legitimate authority and powers of the City of Glendale, and any unsafe streets are the responsibility of the City of Glendale.  The fact that citizens are held bound to a private agreement does not grant the HOA the legitimate right and authority to regulate the usage of public streets. 

As to the buyer’s “understanding that there would be control of safety and welfare”, it does not warrant turning a blind eye to the HOA control of public streets.  These buyers are mistaken, or have been misled by those special interests, that the HOA rules supreme. 

This use of “all” is argumentative and does not explain objections by residents of HOAs to the regulation of public streets by a private organization, of “banana republic” due process, etc.  My experience shows that many homeowners are shocked at the invasion of the privacy of their homes by the HOA, and, contrary to sanctity of individual private property rights, that their rights can be trampled upon by a vote of their neighbors, without their consent.

Is this the position you are defending when you say you are speaking for your constituents?   Supporting a constituency that rejects the supreme law of the land, the US and Arizona constitutions in favor of a private “contract”? A contract that these people regard as superior to the Constitution? 

Read the complete email response at Mayor.