Tag: private contract

Political dynamics at play in HOA-Land

“In order to succeed you must accept the world as it is and rise above it”

Historians have referred to the American Revolution as the “American Experiment” because it introduced a modern, as of that time, form of a democratic republic.  Would such a government based on the principles, beliefs and values of our Founding fathers survive the passage of time?  However, over the past century there has been a slow but steady erosion of the American Experiment. 

Simply stated, the following questions remain unanswered by state legislatures or HOA special interests, first asked in 2005:

  1.     Can a legislature delegate its functions, not government services but functions, to private entities without oversight or compliance with the Constitution, as required of all government entities?
  2.      Can private parties enter into contractual arrangements using adhesion contracts and a constructive notice consent, which serves to regulate and control the people within a territory (an HOA), to circumvent the application of the Constitution?

(Why Homeowners Associations (HOAs) should and must be made political subdivisions) (2012).

Failing to address these fundamental questions has permitted HOAs to exist as de facto governments functioning as a second form of political government within the US. HOAs reject the US Constitution by their actions — forget the words.  In 1964, with the publication of the Homes Association Handbook, Technical Bulletin #50, by the Urban Land Institute, and with the support and funding of private interests and federal agencies, the birth of the Second American Experiment went largely unnoticed.  

“The special interest promoters have described this second Experiment, boastfully, not as a revolution, but as “The Emergence and Acceptance of a Quiet Innovation in Housing”.  This second experiment was not a strengthening of democracy, but one that promoted and established, with the support and cooperation of the state legislatures, private, contractual, authoritarian government regimes.”

Homeowners Associations: the Second American Experiment (2008).

 

HOA management case study – 2022 epilogue

Author’s note:  This commentary is a follow up to my Dec. 2021 – Feb. 2022 “mgmt case study” posts relating to an Arizona HOA. Its board has continued its path with a few suggestions on open meetings and videotaping the board meetings.  The series starts by entering “case study” in the Search box in the left panel. This is a reorientation and educational process, but the board is not yet amenable to hear the whole truth about HOAs.

Resource: Towe Lifestyle article: SCG community is a business

“[The board of directors]  bring an extraordinary level of imagination and management expertise to bear on the very complex problems of running a sophisticated and demanding business. No sugar coating either. The men and women serving you on the BOD represent you and your interests with a sincere desire to make Grand the very best place it can be.[1]

I beg to differ with this statement on several issues that I see as PR and more BOD propaganda.[2]

First, SCG is not a business!  Did you sign a commercial UCC contract or residential  real estate contract? Enough said! From whence  does this mistaken belief  arise.  In my many years of research I found it to be from long term indoctrination and acceptance of the teachings of the CAI School of HOA Governance[3], my categorization, of CAI’s special interest agenda. There is strong evidence supporting the view that CAI dominates SCG policy.[4]

In 2015 the board claimed in its IRS tax-exempt application that SCG was a nonprofit social welfare organization and was not applying for exemption as an HOA.  There are no grounds, no authority in the governing documents, then and now, to make such an assertion. In the application, the president informed the IRS that SCG provides services “benefitting both the Sun City Grand community and the surrounding community.” You will not find that “and surrounding community” claim anywhere else but on the IRS application.

Second, the article contains a number of vague and confusing assertions not supported by the facts,  and contradict such attitudes found in other BOD publications by other SCG officials. One gets a sense of Who’s in charge? Additionally, it raises the question of board competence, which can be found in recent actions and decisions by the BOD[5]. Puffing can be found in the article:

  • “an extraordinary level of imagination and management expertise”
  • “to make Grand the very best” contradicts the Vision statement that proclaims SCG is already the best, “Grand is the premiere age-restricted adult association.”
  •  “sophisticated and demanding,” which is undoubtedly demanding but a sophisticated” business?  Are the demands on the board of directors beyond its pay grade? Does the public view town managers, SCG equivalent to CAM, viewed as a business? Does the public view town councils, the equivalent of the SCG board, viewed as a business?

Finally, “[Directors] on the BOD represent you and your interests” is misleading and contradicts the law and SCG policy that the board owes its obligations to the HOA “person.”  The 2021 Candidates Package paragraph “9a”,  makes my point. “Directors work first and foremost for the best interests of the Association.”  This authoritarian tone is contrary to our democratic values. This attitude reflects its policy to run SCG as a business, and at times a for-profit business.  

I’m left with who and what is SCG?  The governing documents, like the US Constitution make that clear; yet the board hasn’t seemed to accept this foundation for its authority to act on behalf of the members, and that’s not to be a business.  It has failed to address two top level management concerns of boards of directors: What is our business and what should it be?

As I detail in “CAI dominates SCG” (see link below), the board has a duty of care and a fiduciary responsibility to the members. Unless the BOD does an about face in regard to its CAI legal advisors, members can expect more of the same in dealing with several serious legal matters that are on the horizon.

Notes

[1] Robert Towe,  Board Director, “Our Great Community”, Lifestyles, Oct. 2022.

[2] “Propaganda” is false statements, half-truths, omission of facts, and misrepresentations designed to produce a favorable attitude and mindset in the targets.”  The BOD provides illusions of happiness and approval, and are supported by the majority of their members; its messages use propaganda statements — disinformation consisting of false, misleading, half-truths, omitting facts, and fear.

[3] CAI School of HOA Governance: The foundation and principles of the School can be traced back to CAI’s Public Policies, The CAI Manifesto (its 2016 “white paper”), its numerous seminars and conferences, its Factbooks and surveys, its amicus briefs to the courts, and its advisories, letters, emails, newsletters, blogs etc. I have designated these foundations and principles collectively as the CAI School of HOA Governance.

[4] Read the domination argument paper at:   CAI Dominates SCG.

[5] See Wizard of SCG.

Will ULC pursue HOA Member Bill of Rights?

“Can private parties enter into contractual arrangements, using adhesion contracts and a constructive notice consent, that serve to regulate and control the people within a territory (an HOA), to circumvent the application of the Constitution?”[1]

In August I commented that I was working with 2 institutions on a Member Bill of Rights.[2]

“Currently, I am working with two leading institutions concerned with state laws and the constitutionality of the HOA legal  structure. Addressing the Bill of Rights issue is relevant to conducting necessary research and studies. A Homeowners Bill of Rights would be a major step toward the equal protection of the laws for members of HOAs.

“As a result of my proposed research by  independent, objective researchers,  the law will be clarified and all parties set straight as to their rights, and on the legitimacy and validity of independent private governments in America.”

The Uniform Law Commission  (ULC) will decide on the 29th whether or not to undertake a study of my proposal for  meaningful revision to its UCIOBORA (2008).  It’s composed of only attorneys appointed by state legislators and are pro bono.  I must call to your attention the long established presence of CAI at ULC and with respect to UCIOA.

I believe that ULC will move ahead and make the Constitution and state laws living documents reflecting the overwhelming evidence for the need to admit that HOAs are invalid ab initio — from the very start — agreements and are unconstitutional.  

Notes

[1] The “end of denial” of unconstitutional HOAs, August 5, 2020.

[1] HOA Bill of Rights redux, August 29, 2020. Updated, HOA bill of rights history updated Sept. 13, 2020

Protecting HOA political free speech on matters of general community interest

Should matters of concern and interest to the general HOA member-community be protected from suits designed to stifle participation in HOA governance?  Homeowners in HOAs should be protected from these suits, called SLAPP suits, just as the general public is protected in most states that have anti-SLAPP laws.

The question becomes: will the courts hold issues of HOA governance to be a matter of general public interest and concern?  A failure of the courts to do so puts HOA governments solidly into the category of independent principalities, where members are not permitted free speech on community public issues, especially about their governing body, the HOA.

The expected defenses are 1) that HOAs are private, contractual governing bodies not subject to the 14th Amendment protections, which the members have agreed to obey; and disregarding the Ruiz opinion above,  2) the local HOA community cannot be considered as a public body that is interested in and concerned with matters of public interest; it’s a local, private matter.

There are several California cases holding that HOA concerns amount to public speech because it affects the community at large.  The following are anti-SLAPP suits.

“A SLAPP suit (strategic lawsuit against public participation) is a lawsuit brought primarily to chill a party’s constitutional right of petition or free speech. The anti-SLAPP statute was enacted to prevent and deter lawsuits that chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances and provides “an efficient procedural mechanism to obtain an early and inexpensive dismissal of nonmeritorious claims” arising from the exercise of those constitutional rights. . . . . The resident’s front lawn is a public forum for purposes of the First Amendment. . . . Moreover, it is now well established that the anti-SLAPP statute protects private conversations as well as those occurring in a public forum.” (Santa Barbara).

“’Public interest’ within the meaning of the anti-SLAPP statute has been broadly defined to include, in addition to government matters,  ‘private conduct that impacts a broad segment of society and/or that affects a community in a manner similar to that of a governmental entity.’ (Ruiz; according to California statutes).

[My emphasis]

“[W]e hold the trial court properly determined the anti-SLAPP statute applied because the evidence showed the alleged defamatory statements were made “in a place open to the public or in a public forum” and concerned “an issue of public interest. . . .  The two locations where the alleged defamatory statements were made–at the Board meetings and in the Village Voice newsletter [HOA] –were open to the public and constituted “public forums.” Additionally, because each of the allegedly defamatory statements concerned [*11] the manner in which a large residential community would be governed, they concerned “issue[s] of public interest.”  (Damon).

“A homeowners association board is in effect ‘a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government’ (citing Cohen v. Kite Hill Community Assn).”  (Damon).

My quick survey of state anti-SLAPP laws shows AZ, IL, HI, GA and MD as having strict laws relating to only issues before the legislature or a law, as petitioning rights.  A host of other states contain the much broader right to file an anti-SLAPP suit for issues of public interest. They are: CA, FL (as of 7/2015), IN, LA, OR, RI, TX, VT, and WA.  Check current status.

Case references:

  1. Santa Barbara Beach Club HOA v. Freeman, 2d Civil No. B212972 (Cal. App. 2nd 2010)
  2. Ruiz v. Harbor View CA, 37 Cal.Rptr.3d 133 (2005)
  3. Damon v. Ocean Hills [an HOA], 102 Cal.Rptr.2d 205 (2000)

NJ bill A469 a step toward regulatory agency oversight of HOAs?

NJ bill, A469 (former A1730), sponsored by NJ Speaker Pro Temp, Jerry Green, attempts to detail certain state protections for owner-members of HOAs.  Detailed protection is needed as a result of the vague and broad language of the statutes and governing documents that cause 1) unknowledgeable owners who complain to be “blown away” by HOA “officials,” including attorneys, and 2) unnecessary law suits just to clarify language that the HOA attorneys know misrepresent legal doctrine.

For example, “attorney-client privilege” is abused to apply to legitimate corporate records that are not attorney work products; and the misleading, contractual “after notice and opportunity to be heard” phrase regarding complaint hearings that short circuits the legitimate due process protections specifying confrontation of witnesses, providing evidence and the questioning of witnesses by an independent tribunal.

Among other things, the bill addresses due process by DCA (Department of Community Affairs) and fair election procedures, another vague and unspecified process in the governing documents.  It further takes the proactive step, as I’ve alluded to in my writings on HOAs as a government entity, with the pronouncement that, “Any governing documents of an association not in compliance with this section . . .  shall be deemed amended to be in compliance” (C.45:22A-43.c); and “Notwithstanding the provisions of any law to the contrary, a homeowners’ association shall be deemed to have amended its governing documents, including its bylaws” (45:22A-46.e.) (my emphasis).

In addition, additional regulatory powers are granted to DCA, “The Commissioner of Community Affairs shall promulgate any rules and regulations that may be necessary to effectuate the provisions of [this bill]” (C.45:22A-48.b).

Relevant excerpts from this bill can be read at Excerpts.

Some call it government interference in a democratic society.  Others, including yours truly, see it as legitimate police powers of the government to protect its citizens. As stated in this bill in its closing “Statement” (“legislative intent” statement), “This bill clarifies the intent of the Legislature that P.L.1993, c.30 (C.45:22A-43 et seq.) be viewed as an enabling act for homeowners’ associations of non-condominium types of planned real estate developments . . . .” (My emphasis).

In fact, the Planned Community Act states,

 “45:22A-22. Public policy

“The Legislature in recognition of the increased popularity of various forms of real estate development in which owners share common facilities . . .  deems it necessary in the interest of the public health, safety, and welfare . . . that dispositions in these developments be regulated by the State pursuant to the provisions of this act.

“45:22A-24. Administration of act. 4.

“This act shall be administered by the Division of Housing and Development in the State Department of Community Affairs, hereinafter referred to as the “agency.”

Does NJ law make HOAs an arm of the state, state actors, or an unconstitutional delegation of legislative powers to a private entity? 

In short NJ law has created a state regulatory agency and is now proposing to grant it further legitimate authority under its police powers in the “interest of the public health, safety, and welfare.”  An “enabling act,” as the statutes are clearly being designated, is required to grant powers and authority to state agencies.  State agencies are “arms of the state” subject to the 14th Amendment.

If deemed not, then do the NJ statutes provide sufficient control and oversight of private entities by the legislature?  I believe a resoundingly not!  A469 attempts to move in this direction, but more is needed.

I argued this issue in regard to HOAs in general in Supreme Court says corporations cannot be used to evade Constitution and Regulatory agency enforcement of HOA violations.