Tag: restatement of law

Alleged waiver of rights in HOAs are invalid

I congratulate California Senate Majority Leader Ellen M. Corbett for sponsoring SB 561. This bill asserts California’s rightful authority to impose and restore law and order over this second form of political local governments known as HOAs. This is still America, a land under the rule of law. The disintegration and fragmentation of government and society must be stopped before anarchy reigns, right here in America.

 

The law firm of Swedelson & Gottlieb (S & G) argues on its Blog that they know of no one losing their home just because they waiver their rights to have their payments applied first to assessment reduction rather than to collection costs. There are good, equitable and just reasons for paying down the debt first: paying the costs first prolongs the collection agency income stream, not the HOA’s, as the amount of debt goes on forever and may never decrease. Under these circumstances, like “being under water” in today’s housing market, why pay at all?

 

HOAs are required to apply payments to debt reduction, just like your credit card companies. With a straight face S & G states, “We are aware of no homeowners who have ever lost their homes in an association’s foreclosure simply because of unpaid fees and costs of collection.” So, I guess all is well and right with this use of the payment waiver.

 

This attitude, used by other proponents favoring the survival of the HOA and their incomes streams, portrays all members of an HOA as being so enamored with their HOA that they place their well being and financial conditions in the hands of the HOA board. They are portrayed as being true believers seeing no wrong with the HOA, much as one sees with many religious cults. They are portrayed as openly and eagerly waiving their rights in favor of the HOA no matter how disastrous to them. How insulting to all Americans: your obligation to the “state”, the HOA, is to make timely payments, and any rights, freedoms, privileges or immunities are notwithstanding.

 

In its argument for payment plans, created by the HOA’s agent, but “the board dictates the terms of the agreement,” S & G seems to contradict its argument that the “pay costs first” is for the benefit of the HOA, not the collection agency (emphasis added).

 

There is good reason for this– boards know from experience that many homeowners pay the assessment portion of the payment plan agreement but do not pay the costs of collection, knowing full well that the association cannot foreclose for costs of collection only.

 

Say what? The debtors will pay their assessments to the HOA, making the effort for the benefit of the HOA, not the collection agency? Why would a board give up its first claim to $$$ for the benefit of the collection agency? That doesn’t make sense at all, does it? Why are HOA boards allowing their right to first $$$ go to a “hired-hand” vendor, in violation of their duties to the HOA? Why?

 

It makes sense if the whole purpose of S & G’s position is not to benefit the HOA but its own pocketbook. Furthermore, S& G continues to whine about the debt owed to them that the HOA cannot pay since all the money is going to the HOA first. Boo hoo! I guess they know all about “You can’t get blood from a turnip.”

 

Isn’t that a business decision all businesses face? The loss against the cost of collecting? What about contingency collection agency arrangements? Don’t let S & G slip past this point! If they are so good, the HOA should insist on this type of an arrangement rather than the punitive arrangement now commonly used.

 

And when all else fails, we hear the familiar mantra, “But really, is it fair for the paying/current homeowners to have to subsidize delinquent homeowners?” Well, you see, that “contract S & G says binds all homeowners may not be fair to some homeowners, but that’s what the legal structure of an HOA imposes on members. Is it fair not to tell home buyers about this, and about some other waivers and surrenders of rights unbeknownst to them? Take a look at “The Truth in HOAs Disclosure Agreement” for some eye-openers.

 

Cleverly, S & G avoids the question of a violation of public policy, which as stated in the Restatement (3rd) of Property:Servitudes, Sec. 3.1, makes any covenant invalid. The argument against SB 561 is simply: How dare the California Legislature prohibit a homeowner, exercising his write to contract, without any duress, from surrendering his right to the ethical and fair procedure of debt reduction before costs. How dare the legislature!

HOA foreclosure rights — in-depth discussion with CAI’s CEO and Berding

An excellent news feature from CNBC on HOA foreclosures including CAI’s Tom Skiba and attorney Bill Davis, who is the fellow being sued by John Carona’s corporate entities has been posted on Evan McKenizie’s The Privatopia Papers blog.  See The next foreclosure fight, redux…

An amazing 32 comments in two linked threads have been posted by interested persons including, among “anonymouses,” Evan McKenzie, Tom Skiba (CAI CEO), HOA defender Tyler Berding, Fred Pilot, Fred Fischer,  and yours truly, G K. Staropoli (PVTGOV).  Where are you other guys?

The issue of HOA foreclosure rights is covered quite extensively from several points of view.  If you want to be in the “know”, you must read these comments to better understand the lunacy of “they signed an agreement to pay assessments” and “it ain’t fair for good owners to pay for  these people.”

Get your voice heard.  Send this Privatopia link to your state repesentatives today!

 

Philippine HOA “Magna Carta” law not based on servitudes

Running through the first few pages of this 20-page PDF on what we would call an HOA Act, but called a “Magna Carta” for HOAs in the Philippines. “SECTION 1. Title. – This Act shall be known as the “Magna Carta for Homeowners and Homeowners’ Associations”. It is a combined social welfare land, reform act and local citizen governance by means of non-profit entities  that allow multiple HOAs within a subdivision.

There is no equitable servitudes law for covenants running with the land that make a mockery of US claims to be the best democratic country in the world. There is no private agreements to replace the Constitution, and allowing the Justices and judges to treat as if it were just another piece of paper.

Most decisions are made by simple majority vote, and members “shall have the following duties (a) to pay membership fees, dues and special assessments; (b) to attend meetings of the association.” It appears that the Filipino law contains most of the same operating provisions as found in the US version. However, audited statements must be posted annually and filed with the national government agency overseeing HOAs (Sec. 17(c)).

Now, how about this requirement of one unified government rather than independent principalities as in the US”

SEC. 19. Relationship with National Government Agencies. – The associations shall complement, support and strengthen the efforts of the national government agencies in providing vital services to their members and help implement the national government policies and programs.
Associations are encouraged to actively cooperate with national government agencies in the furtherance of their common goals and activities for the benefit of the residents of the subdivisions and its environs.
National government agencies shall consult the associations where proposed rules, projects and/or programs may affect their welfare.

Interesting reading for the American legal-academic aristocrats seeking to become Philosopher-Kings, and announce what is good for the American people.

Narrow interpretations of HOA law and Rule 11(a): CAI game plan?

 In order to understand CAI’s adversarial position to homeowner reforms and its activities to promote litigation challenges, we need to look into its activities and not its lofty pronouncements. As you know, Rule 11(a) requires that the attorney perform a reasonable inquiry into the genuine issues of law or fact of the HOA allegations before undertaking any law suit. (See HOA attorney failure to inquire into merits of a complaint — R Civ P. 11(a)). We can get a good idea of CAI’s motivations for pursuing litigation from its activities with respect to HOA reform laws.

In spite of strenuous opposition by advocates, the sponsor, Arizona Rep. Montenegro, pursued this bill, HB 2441, to the very last floor vote before it was soundly defeated. (See CAI soundly thrashed by Arizona Senate). His support for this disgraceful bill can only stem from 1) that he is true believer in the New America of HOA-Lands, or 2) that he succumbed to the heavy influence of the national trade organization, CAI.

Advocates had attempted to inform Montenegro and the legislators of CAI’s real intent, which was not the betterment of the community or the state of Arizona, but its own self-interests – control of the HOA landscape.  As further evidence of this opposition to the intent of the law, the former CAI chapter president and lobbyist, Scott Carpenter of Carpenter Hazlewood, released examples of what could be seen as “how HOAs can get around the law.”

In my comment to New Arizona laws for 2011 session — thanks to the legislators, I critique Carpenter’s “reasonable rules” that HOAs may impose on the recording of HOA meetings, the new HB 2445 law. One is a 24-hour prior written notice to the board, which can easily “disappear” at its convenience. Also, among is “reasonableness” are that all recordings must be on tripods and must use batteries – seems contradictory with respect to its stated concerns about safety issues. And that the HOA has a right to obtain a copy of the recording – at a reasonable cost. H’mmm, maybe the feel paranoid and that its own recordings won’t capture everything? Or is he just putting up obstacles “to make life difficult?”

Again, a CAI attorney, Carolyn Goldschmidt, takes up another controversial issue with respect to applicability of Title 10 statutes for nonprofit corporations and Title 33 statutes on HOAs and condos. (By the way, the resurrected statutes for ALJ adjudication of HOA disputes, SB 1148, does not permit the ALJ to decide issues outside of Title 33). Basically, does ARS 10-3708 or ARS 33-1812 control the holding of HOA elections and meetings? In an attempt to avoid the HOA statutes with respect to meetings and elections, Goldschmidt narrowly argues that an election without a meeting is valid under Title 10. Yet Title 33 contains strict requirements for meetings and elections – notice, ballot, agenda and quorums.

The HOA held an election that was not part of the meeting, as it claims, and the subsequent meeting just counted the votes but took no action. Say what? Isn’t a “certification” or a counting of election results at an annual meeting an “action”? And, as Goldschmidt well knows as she had participated in several OAH complaints, this dispute would not fall under the Office of Administrative Hearings jurisdiction by an ALJ. (And neither would the other very important common laws found in Chapters 6 and 3 of the Restatement (Third) of Property: Servitudes).

It is these actions in the real world and not the pontifications by CAI and it seminars, conferences, articles, columns or interviews that reflect what CAI is all about. That reflect CAI attorney pursuits of litigation, advertising and advising loopholes in the laws using narrow interpretations of the law, which can be highly questionable under Rule 11(a). And it is not about principles of democratic government within the New America of HOA-Lands or making for a better America or community, its about power over the HOA second form of political government. And attorney fees.

If charged with violating Rule 11(a), and so judged, can the HOA file against the attorney for its attorney fees?

HOAs in America: the illusion of democracy in a dysfunctional republic

In order to understand the public policy toward homeowner associations with its manufactured appearance of bona fide homeowner consent, we need to examine the political climate and value system within our society.

See short video paralleling the decline of Rome. 

1. The empty value system – anything goes

The Declaration of Independence provided the fundamental basis for the unalienable rights that no government may take away from the people. Unfortunately, contemporary political and judicial leadership has failed to retain and uphold our unalienable rights in a replacement value system of ethics and morality.

2.  The decline in the caliber of elected officials and the rise of political party ideology

 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 ideology increases it.

3.  Legitimate government and the illusion of justice

And speaking of justice, the necessary ingredient for the claim to the legitimacy of government and to be obeyed in conscience, Allen offers Machiavelli’s advice, “Because the [right] to rule is rather the appearance of justice rather than justice itself, the appearance of injustice defeats every [right] to rule.”

4.  The rise of authoritarian private HOA governments

“Therefore this Restatement is enabling toward private governance. The question of whether a servitude unreasonably burdens a fundamental constitutional right is determined as a matter of property law [meaning these servitudes], not constitutional law.” And, “What has been deliberately and carefully made ‘socially acceptable’ was, not too long ago, thought to be irresponsible — both financially and morally.”

5. The transformation of society and the acceptance of the New America of HOA-Lands.

 There are parallels between the acceptance and establishment of the HOA as an institution, and the influence and acceptance of Nazi doctrine in Germany before and during WW II. Both offered benefits and serious drawbacks, but only the pluses were seen and not the negatives. The rationale of the defenders of Nazism follow a similar pattern to that of the defenders of the HOA authoritarian, private government.

Mayer wrote that the “good” Germans went along “in the usual sincerity that required them only to abandon one principle after another, to throw away, little by little, all that was good.”

 

Read the complete article HOAs in America.