Tag: quasi-government

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)

Colorado HOA act creates state actors?

I give credit to the Colorado Legislature for stating its intent, its position, on supporting HOAs, which is rarely found in other state statutes.  Section 38-33.3-102 reads (in part):

Legislative declaration

(1) The general assembly hereby finds, determines, and declares, as follows:

(a) That it is in the best interests of the state and its citizens to establish a clear, comprehensive, and uniform framework for the creation and operation of common interest communities;

(b) That the continuation of the economic prosperity of Colorado is dependent upon the strengthening of homeowner associations in common interest communities financially through the setting of budget guidelines, the creation of statutory assessment liens, the granting of six months’ lien priority, the facilitation of borrowing, and more certain powers in the association to sue on behalf of the owners and through enhancing the financial stability of associations by increasing the association’s powers to collect delinquent assessments, late charges, fines, and enforcement costs;

 

Subsections (c) – (e) contain basically the same theme — don’t let the HOA fail by providing the developer with certain financial protections and operating rules on good management.  In a bold, in your face statement the statute contains an annotation, which reads:

There is no support for the proposition that enactment of a legislative scheme governing the operation of homeowners’ association thereby transforms such homeowners’ association into cities or other governmental entities. Woodmoor Improvement Ass’n v. Brenner, 919 P.2d 928 (Colo. App. 1996).

This 1996 authority still holds true today.  State governments regulate people and entities by establishing laws, such as these HOA “acts” under its police powers “to promote the general welfare.”   That has come to mean to protect the health, safety and general welfare of the people.  The issue at hand, which has not been tested in the courts, is: when does and under what circumstances do these HOA acts create HOAs as state actors?[1]

It would seem that just from this Legislative Declaration of purpose there are reasonable grounds to suspect state cooperation (no penalties against HOA violations of state laws or the governing documents), coercion (foreclosure, pay or lose your home, etc.), and support for HOAs, a close nexus with daily operations (closely involved on HOA management) s symbiotic relationship (you help me, I help you), significant encouragement, either overtly or covertly.[2]  But no mention of any protections of due process and the equal protection of the laws as an objective of its involvement in HOA-Land.

Note that subsection 1(a) above speaks not of individual statutes, but of “a clear, comprehensive, and uniform framework” to support HOAs. Therefore, we must look at the overall picture of the HOA act and determine its broad impact on HOAs, and whether the legal scheme or structure establishes state actors.  And in 1(b) above the general assembly makes a case for establishing state actors when it states, “by increasing the association’s powers to collect delinquent assessments, late charges, fines, and enforcement costs.”  The details can be found within the act itself.

Please understand that in the statutes, both in Colorado and in other states, the statutes give the appearance of protecting the homeowner and his rights, but this is an illusion. What does the homeowner do if the board violates the law?  His ultimate recourse is to sue the HOA in civil court, but the statutes and governing documents (and court case history) are protective of the HOA as this Colorado section clearly demonstrates.

Where are the constitutional protections that would remove the HOA member as a second-class citizen?  To bring him back into the American Zone? They are nowhere to be found!  Why?  Because the state believes that the homebuyer has freely and with full knowledge agreed to be bound by the explicit and implied waivers in the governing documents.  But, have they?[3]

It would seem that the Colorado General Assembly has crossed the line and by its HOA statutes created HOAs as state actors.

References

[1] See, in general, HOA Common Sense, No. 9: HOA governments in fact.

[2] See Do state HOA Statutes Establish HOAs as State Actors?

[3] See HOA Common Sense, No. 4: Consent to be governed

HOA Case History: state actors or mini/quasi government

  1. Cohen v. Kite Hill,142 Cal App 3d 642 (1983) (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.”)
  2. Gerber v. Long Boat Harbour, 757 F Supp. 1339 (M.D. Fla. 1991) (court enforcement of private agreements in condo declarations is a state action; flag; free speech).
  3. Hudgens v. NLRB 424 US 507 (1976) (functions of a municipality, citing Marsh; shopping center)
  4. Marsh V. Alabama, 326 US 501 (1946) (company town and public functions)
  5. Shelly v. Kraemer 334 US 1 (prohibitive state actions by use of judicial enforcement as state was fully aware of the illegal use of the courts; judicial enforcement harms constitutional rights)
  6. Williamson v. Lee Optical, 348 US 483, (1954) (rational basis for scrutiny)
  7. Damon v. Ocean Hills Journalism Club,  85 Cal. App. 4th 468; (2000) (quasi-government; board meetings public forums similar to government body;defamation)
  8. Laguna Publishing Co. v. Golden Rain Found. of Laguna Hills, 131 Cal. App. 3d 182 (1982) (HOA has attributes that “in many ways approximate a municipality . . . close to a characterization as a company town.”)
  9. Surfside 84 v. Mullen Ct. of Special Appeals of Maryland, No. 495 (September 1984) (state action; procedural due process; lack of notice; CAI Reporter).
  10. Brock v. Watergate 502 So. 2d 1380 (Fla. 4 Dist. App. (1987)( public functiuons test; close nexus criteria; HOA lacks character of a company town)
  11. Committee for a Better Twin Rivers v. Twin Rivers, 929 A.2d 1060 (NJ 2007) (HOA not state actor per NJ Scmidt version of Marsh; Not US but NJ Const. case).
  12. Indian Lake v. Director of Revenue, 813 SW 2d 305 (not civic organization)
  13. Midlake v. Cappuccio, 673 A 2d 340, Pa. Super. (1996) (condo is a pvt organization, not muni govt; not a company town)
  14. Riley v. Stoves, 526 P.2d 747, Ariz. App. Div. 2 (1974) (state action; classification; enforce age restrictions;”court to enforce constitutional commands”; restriction was a permissible government interest).
  15.  S.O.C. v. Mirage Casino-Hotel, 43 P 3rd 243 (Nev. 2001) (state action; public functions; delegating functions to private persons; commericial advertising on private property).
  16. Terre Du Lac Ass'n, Inc. v. Terre Du Lac, Inc., 737 S.W.2d 206 (Mo. App. 1987). (quasi govt) (how a homeowner's association operates as a "quasi-governmental entity," not authority for the concept that an association's "quasi-governmental" actions are state actions;).
  17. Westphal v. Lake Lotawana, 95 SW 3d 144 (Mo. App. 2003) (no support for “close nexus” state action).

Note:

  1. The above cases in bold are color coded. Red is adverse to constitutional protections; Blue is favorable; black in neutral.
  2. There are 3 case against and 4 cases in favor. Two were not dispositive. The “against” cases were all based on a “public functions” test.
  3. The non-bold cases concern related issues not involving an HOA/condo, such as state action, public functions, or mini/quasi governments.

  4. The above findings are not exhaustive and reflect the analysis of some 153 HOA/condo , state action cases on a federal and state level.