Tag: Nevada

Can the HOA legal scheme survive constitutional due process?

Bob Frank, a Commissioner on the Nevada Commission for Common Interest Communities and Condominium Hotels, asked in the LinkedIn group, Condo Association (and HOA) Network, Should States Pass “Due Process Regulations” Along The lines of The Following Draft?

My comment follows:

Bob, an excellent in depth presentation of HOA due process procedures. Allow me to provide the authority for your proposal. Judge Henry Friendly in his well-regarded article, “Some Kind of Hearing,”[1] generated a list that remains highly influential, as to both content and relative priority (my emphasis):

  • An unbiased tribunal;
  • Notice and grounds for the proposed action;
  • An opportunity to show why the proposed action should not be taken;
  • The right to call witnesses;
  • The right to know opposing evidence;
  • The right to have the decision based only on the evidence presented;
  • The opportunity to be represented by counsel;
  • A record of the proceeding;
  • A statement of reasons;
  • Public attendance; and
  • Availability of judicial review.

 

As you will note, the first listed item above requires “an unbiased tribunal.” What would you add to your proposal to further protect the integrity of your HOA due process procedures? Obviously some sort of code of conduct for those sitting on the “hearing tribunal” is in order. Following are the four Canons taken from the American Bar Association’s Model Code of Judicial Conduct[2].

CANON 1

A judge shall uphold and promote the, independence, integrity, and impartiality of the judiciary, and shall avoid impropriety and the appearance of impropriety.

CANON 2

A judge shall perform the duties of judicial office impartially, competently, and diligently.

CANON 3

A judge shall conduct the judge’s personal and extrajudicial activities to minimize the risk of conflict with the obligations of judicial office.

CANON 4

A judge or candidate for judicial office shall not engage in political or campaign activity that is inconsistent with the integrity, or impartiality of the judiciary.

I would think that third-parties with some legal background would be the way to go, but this would run into the dogmatic “the HOA members shall judge their ‘peers.’” But, then again, is that possible?

You have touched upon one of my 5 HOA substantive reforms arguments, “Fair and Just Hearings,[3] the absence of which is a clear indication of the oppressive and authoritarian nature of the HOA legal scheme.  If it is possible to obtain fair and just hearings, would this move toward democratic reforms cause the HOA legal scheme as it exists today to collapse, or can the real estate package governed by an HOA government survive governed by a true democracy?[4]

References

[1] Judge Henry Friendly, “Friendly, Some Kind of Hearing,” 123 U. PA. L. Rev. 1267, 1279-1295 (1975).

[2] American Bar Association’s Model Code of Judicial Conduct (http://www.americanbar.org/groups/ professional_responsibility/publications/model_code_of_judicial_conduct.html).

[3] See “HOA Common Sense, No. 6, Fair and Just Hearings”.

[4] See “Would the HOA legal scheme collapse under a democratic form of government?”

 

What HOA issues are appropriate for federal intervention?

In my comment (see PVTGOV comment) to Evan McKenzie’s post in his Privatopia Papers blog, Las Vegas HOA corruption probe continues,  (February 26, 2013) I supported McKenzie’s opinion that congressional hearings on HOAs was in order.  In North Carolina and Nevada several homeowner rights advocates felt the same and Norm McCullough contacted Nevada Congressman Joe Heck, who responded on April 22 with,

 I can certainly understand and appreciate your frustrations. Since HOAs are governed by local or state law rather than federal, it would be best to contact your state assemblyman or state senator and local county officials with your comments.

Please be assured that I will keep your comments in mind should this issue be brought to the attention of the House of Representatives for legislative action.

A careful reading of the first paragraph above leads to the obvious: “Not my problem. See your legislators” (my words).  However, he extends hope for homeowners in the second paragraph above, “If HOA issues get here, I’ll remember what you wrote” (my words).  Congratulations to Norm.

Well, just what are federal issues aside from constitutional issues that abound with HOAs?  Let’s take a look at some other recognizable federal laws or “acts”.  There’s the Americans With Disabilities Act, Fair Debt Collections Practices Act, Truth in Lending, Truth in Advertising, Right to Work, etc. all of which deal with practices within an industry that cross state lines.  These are the nationwide practices that need the broad reach of the federal government.  And all the above resulted from abuse against the consumer by the respective industry.  With HOAs, we have very strong legitimate arguments pertaining to constitutional violations that amount to state actions in all states.

If advocates wish to be effective at the national level, they must rise above HOA operational concerns and address issues of national import.  They must be able to understand and deal with these fundamental issues of democratic governance. 

And they must accept the fact that since 1973 CAI has been the aggressive protagonist for the HOA legal scheme or structure that is offensive to our principles of democratic government.

Can municipal agencies be liable under Monell Claims for policies that support HOAs? YES!

The legal doctrine of Monell claims appears to be suited for those instances where public policy permits violations of constitutional rights under 42 US 1983, “Civil action for deprivation of rights”.[i]    These claims can pertain to police departments and county attorneys, planning boards, and real estate departments and other HOA commissioners or ombudsmen officials if they have adopted such a policy. In other words, if it is the policy of a planning board, or the police department and/or county attorney to ignore or dismiss legitimate complaints against HOAs then this policy allows for the application of civil rights protection under federal law.

 In Nevada, Bob Frank and Tim Stebbins have filed such a federal claim[ii] against Henderson Police Department for false arrest and malicious prosecution relating to their whistle-blowing, which involved IRS rules violations relating to tax refunds to HOAs.  Without probable cause and an independent audit, the police arrested the two homeowners under filing a false claim.  Subsequent to their arrest, the IRS completed its audit that did indeed substantiate the allegations of Frank and Stebbins.

Basically, a Monell Claim involves a claim “against a government unit [with] sufficient facts to show (1) the existence of a government policy or custom and (2) that the unconstitutional act was taken pursuant to that policy or custom.”[iii]  Further clarification of what constitutes “policy” was provided in Pembaur v. City of Cincinnati[iv] decision that held, among other things,

“We hold that municipal liability under § 1983 attaches where — and only where — a deliberate choice to follow a course of action is made from among various alternatives by the official or officials responsible for establishing final policy with respect to the subject matter in question.”

In other words, the policy or custom must come from a high-level official who can be said to speak for the agency, and thus the municipality.  For example, Commissioners and Directors who are permitted to set rules and regulations by law.  Any such rule, especially an explicit policy statement, may lead to a Monell Claim. For example, in Pembaur the Prosecutor was held to be the final authority when he told the police to break into a business without a warrant.  In Frank, it is shown that the Police Chief and Municipal Judge approved the probable cause claim for the criminal arrest warrant.  See this link for current documents in this case.

When the “unspoken alliance of no negatives about HOAs” becomes incorporated into an agency policy, then Monell Claims may arise.

 

Notes

[i] “Every person who, under color of any statute, ordinance, regulation, custom, or usage . . . subjects, or causes to be subjected to . . . the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable . . .” (emphasis added).

[ii] Frank v. City of Cincinnati, 2:12-cv-01988-GMN-GFW (D. Nev.) (not decided).

[iii] Supra, note i.

[iv] Pembaur v. City of Cincinnati, 106 S.Ct. 1292 (1986).

HOA Enlightenment Movement is forcing legislatures to protect property values

More and more homeowner rights advocates are realizing that bad media coverage is hurting property values.  They are demanding their legislature to stop the abusive, rogue boards that are giving HOAs a bad image.  The HOA Enlightenment Movement, the surging awareness that HOA regimes have serious legal problems, is the long delayed confrontation with reality that is a “wakeup call” for the legislatures. 

This “no negatives about HOAs” unspoken alliance that has served the industry’s special interests by keeping things under wrap, and not letting the sunlight expose these legal issues that include violations of constitutional law, is collapsing.  The legislatures can no longer stand by with impunity and support the HOA industry through their cooperation, coercion, close nexus in HOA operations, and denials of the equal applications of the laws of the land.  Only just and fair laws will stop the negative exposure of HOA regime un-American conduct.

In Florida, Cyber Citizens for Justice, Jan Bergemann, President, calls the legislature’s attention the following issues:

1. Florida’s economy hinges on a healthy real estate market. Many new retirees, snowbirds and investors are needed to create a healthy real estate market.

2. The nightmare of living in an HOA is hurting our state’s image of retirees moving to Florida to live a hassle free life style.

3. Reforms should create more consumer protection, making Florida again attractive for potential buyers of homes and condos.

In North Carolina, the National Coalition for Homeowner Association Reform group, Jim Lane, Founder, wrote to the legislature,

“Our homes and neighborhoods are at stake — as of now 50% of Homeowners who don’t want an HOA begin to ‘bail out’ of their HOA homes and Buyers go elsewhere, while Property Values go down.”

And in Nevada, newly appointed member of the HOA Ombudsman commission, Bob Frank, is asking the legislature for constitutional protections:

Attached is a BDR intended to help improve HOA property values in Nevada by solving HOA management problems. . . . It is proposed to be labeled the ‘HOA Property Values Enhancement Bill.’ . . . The future speed and depth of recovery of our HOA property markets may depend on this initiative. I believe that most people in this state will be very grateful if you can get HOA contracts bound to our US and NV Constitutions.

Investigative reporter Ward Lucas also echoes this concern for subjecting HOAs to the constitution as is required of all government entities.  In his new book, Neighbors At War!, which is not a book to laugh at but a serious expose of HOA life and what can happen to naive homeowners, he writes,

Your constitutional rights are being secretly shredded . . . A tiny but growing band . . . is at last beginning to say, ‘Enough!.  They can no longer stomach the kind of meaness that can destroy the reputation of an entire neighborhood.  The World Wide Web is giving them a forum they didn’t have before.

It’s only through the challenging, confrontation, and exposure by The Enlightenment Movement followed with the demand for just and fair laws can change be achieved.  Advocates must continue to enlighten state legislators and demand change.

Additional reading on why homeowners are apathetic, aside from the fear of affecting property values, and allow the oppression and injustice to control their lives, see Hign Noon in HOA-Land: members who permit lawless boards to function.

new HOA book — Neighbors At War! by Ward Lucas

Amazon review By George K. Staropoli

This review is from: Neighbors At War! The Creepy Case Against Your Homeowners Association (Paperback)

Neighbors at War! is a refreshing description of what living in an HOA (homeowners association, property owners association, common-interest community or condo association) that the average person can understand. It is not another legal treatise, or academic journal or book, but the writing of an experienced and award winning investigative reporter.

It is a long needed book for prospective buyers of HOA controlled homes or those already living in an HOA. All those state mandated documents do not tell it all, as state legislators are pro-HOA and accept the denials of homeowner rights contained in HOA adhesion contracts.


Ward Lucas ranges far and wide, from questions of constitutionality and denials of bill of rights protections to more down-to-earth issues of HOA procedures and operations. Foreclosure, no fair elections, and kangaroo hearings on violations are examples of the cases and issues that are discussed in easy to understand terms.

I’ve been repeatedly told by legislators that complaining homeowners are trying to get out of a contract, should have read the CC&Rs, and should have gotten a lawyer. And not a word about misrepresentation and fraud.


Do not fall into the trap of Buyer Beware! Read this excellent book and discover what you are not being told by the special interest national lobbying organization formed to protect, not your rights, but the HOA status quo. Neighbors at War! is a must read for informed homeowners and state legislators