Tag: supreme court

When do majority CC&R amendments trample minority rights?

 

The generally accepted legal doctrine upheld by the courts in many states is that any CC&Rs amendment validly passed by the amendment procedures in the CC&Rs is binding on non-consenting homeowners.  This doctrine ignores the content and relevancy of the amendment to the intent and purposes of the drafters, the developer.

The questionable word game involved in this issue deals with the meaning and use of ‘modify’ or ‘change’ as compared to ‘new.’  Does your CC&RS say modify or change, or does it also include the words add or new?  Some courts make no distinction and thereby unconstitutionally modify the CC&Rs contract by depriving non-consenting homeowners of their property rights that they believed they possessed at the time of purchase.

(In general, the dictionaries define ‘modify’ as a change, and ‘change’ to mean ‘to make different,’ but excluding any reference to ‘new.’)

With this presumption in favor of the HOA, these courts fail to determine if this is what the unsuspecting home buyer understands, and that he has been given appropriate notice. Is he aware that ‘change’ also means ‘new’ or ‘add’?  Simply said, we are dealing the ex post facto CC&Rs amendments that deprive a homeowner of his rights without his consent and without any compensation.

In the April 2014, the Washington State Supreme Court opinion in Wilkinson v. Chiwawa,[i] said, wait a minute with respect to rentals.  ‘Change’ or ‘modify’ does not mean ‘add’ or ‘new.’  It held that,

While Chiwawa homeowners knew that existing restrictive covenants could be changed by majority vote so long as the changes were consistent with the general plan, they did not buy into the creation of new restrictions unrelated to existing ones. . . . When the governing covenants authorize a majority of homeowners to create new restrictions unrelated to existing ones, majority rule prevails “provided that such power is exercised in a reasonable manner consistent with the general plan of the development.”

This rule protects the reasonable, settled expectation of landowners by giving them the power to block “`new covenants which have no relation to existing ones'” and deprive them of their property rights.

The Association could not adopt the restriction without unanimous consent. This is the contract into which the parties bought and the expectation that we must uphold.

One of the most notorious examples of this type of amendment occurred in OSCA[ii] where mobile homeowners were forced to pay dues for a country club, owned by the developer and not owned by the HOA, and open to the public on a fee basis.  It helped increase the value of the HOA, was the justification for the amendment.

What does your CC&Rs say?  Watch for those CAI attorney rewrites that sneak these words into your CC&Rs without proper notice, as for example, Arizona requires.

And remember, who writes these state laws?   The  HOA stakeholders that do not include the homeowners!

References

[i] Wilkinson v. Chiwawa, Wn.  No.86870-1, p. 6,7 (April 17, 2014). The issue was an amendment that prohibited short-term rentals when the CC&Rs were silent on duration.  Was it a new covenant or a modification to the one that simple said renting was allowed.

[ii] OSCA Development v. Blehm, No. E320843 (Cal. App. Dist. 4 1999).

Justice Stevens’ constitutional amendments can end private HOA de facto governments as we know them

Allow me to say at the very start that the end of HOA government legal scheme will not end the real estate “package” that constitutes planned communities — the private amenities, landscaping rules and regulations (laws), or private community taxes (assessments).

Over the past four decades, rules crafted by a slim majority of the members of the Supreme Court have had a profound and unfortunate impact on our basic law. Far from striding toward a more perfect union, we have actually slid backwards.[i]

As an extension of the above quote, consider the influence that the modern Ministry of Public Enlightenment and Propaganda,[ii] CAI, has had on our social and political institutions.  (See the national lobbying group’s legislative involvement to protect HOAs across the country in 2013.)

My HOA rephrased quote:

Over the past four decades, legislative and judicial support, cooperation, and coercion for HOA private governments, not subject to the Constitution, have had a profound and unfortunate impact on our democratic system of government.   Far from striding toward a more perfect union, we have actually slid backwards.

Keeping Stevens’ discussion of his “anti-commandeering” amendment simple (see Proposed US Constitution amendments will help HOA reforms), the issue is whether or not the Feds can compel – commandeer – state officials to enforce federal laws.  Article 2 of the Constitution says “the laws of the United States . . . shall be the Supreme Law of the land; and the judges in every state shall be bound thereby.”   So we come to the attorney word games that it does not say that other state officials shall also be bound.  The 10th Amendment says what’s not said belongs to the state.  Well, what did the Framers intend?

Logically, if the judges are obligated to enforce federal laws and an official violates the federal law that orders him to act in such a way, the official can be sued.  What’s the point?  And, as the judges like to say, after a clear reading of the law, the first part of the clause stands by itself: “the laws of the United States . . . shall be the Supreme Law of the land.” But, dealing with realities and the whims of the Justices in several decisions, Stevens feels inserting “and other public officials” after “judges” will make it quite explicit.

What this amendment can mean is that the Feds, as many are asking, can order state officials to enforce federal laws and the Constitution.  State legislatures and attorney generals would be answerable to the Feds instead of giving lame excuses of, ask the legislature to give me the power.  It’s a mockery of law and justice when individual states can ignore the Constitution that binds this country.  It’s a mockery of law when state legislatures approve HOA laws that unquestionably violate the laws of the land.

References

[i] Six Amendments: How and Why We Should Change the Constitution, front flap, Justice (ret.) John Paul Stevens (Little, Brown and Company, 2014).

[ii] “The Ministry of Public Enlightenment and Propaganda” was the NAZI agency headed by Josef Goebbels.

 

Proposed US Constitution amendments will help HOA reforms

I have cautioned my followers about the ‘games’ that lawyers play with the precise wording and grammar used in bills and, eventually, the resultant laws.  They love to parse the sentences and apply interpretations that have a plausible relationship to a valid legal issue.  When they seek a ‘loophole’ in the law the plausible becomes unreasonable, yet the courts will go through the exercise and entertain a challenge to the law.

What is needed is a tightening up of the laws and bills as a result of an analysis of how their wording can be used to get around the intent of the bill.  With respect to HOAs this is an unlikely task when state legislatures favor the HOA legal scheme currently adopted as public policy. But there is hope stemming from the very top, from retired Supreme Court Justice Stevens who has proposed Six Amendments[i] to the US Constitution.  Below are 2 of the 6 proposed amendments that are particularly important to HOA reform legislation.

 

The “Anti-Commandeering Rule” (Amend the Supremacy Clause of Article VI) — This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges and other public officials in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.

Sovereign Immunity – Neither the Tenth Amendment, the Eleventh Amendment, nor any other provision of this Constitution, shall be construed to provide any state, state agency, or state officer with an immunity from liability for violating any act of Congress, or any provision of this Constitution. [New amendment].

In the “Anti-Commandeering Rule” Justice Stevens found it necessary to add “and other public officials” to explicitly bind government officials to obey the Constitution and laws of the land.  I am sure that the Founding Fathers did not think such an explicit statement would or should be necessary.  But, it’s obvious that our elected officials have forgotten their duties and obligations to the Union in favor of their political party dogma and their concern for their legacies. Just review recent state supreme court HOA decisions and the numerous pro-HOA state laws to understand the need for this constitutional amendment.

In the “Sovereign Immunity” amendment Justice Stevens found it necessary to hold elected officials on the federal and state levels to their obligation not to violate the Constitution.  The common example can be found in every state’s support of de facto HOA private governments unanswerable to, and circumventing, the US Constitution.   Again, one would not think that this would be necessary to state.

Both of the proposed amendments to the Constitution are the result of how lawyers examine the precise wording of the laws and Constitution, and raise “and, if, or buts” to get around the intent of the laws. Or, even to question the intent of the drafters of the bills.  With respect to HOA legal scheme, must we add such specifics to state constitutions and HOA/condo acts?

Bob Frank, a Nevada Commissioner, raised this very question; “Should HOA/Condo Associations Implement US Constitutional Protections For Residents In CC&Rs?”  in the HOA Common Sense LinkedIn group (must be a LinkedIn member).  It’s a must read!

 

Reference

[i] Six Amendments: How and Why We Should Change the Constitution, Justice (ret.) John Paul Stevens (Little, Brown and Company, April 22, 2014). (Available on April 22th).

Getting the Feds involved in HOA reforms

As apparent from the Illinois Supreme Court opinion[i] favoring HOAs, the Feds need to get involved. However, the Feds, like state attorney generals, have no specific authority to get involved – HOA/condo states are state laws, except for those federal laws like the American Disabilities Act and Fair Housing.

A broader approach is necessary in order to wake up the Feds, and that can come about by an appellate or US Supreme Court case decision on 1) violations of a homeowner’s constitutional rights, or 2) a violation of the 14th Amendment’s equal protection clause brought under federal law § 42 U.S.C. 1983, Civil action for deprivation of rights. This approach would be similar to the whistle blower law suits of Erin Brockovich or Jeffrey Wigand (tobacco nicotine is addictive).

Read the paper at constitutional rights . . . .

 

[i] See IL Supreme Court holds HOAs “are a creature of statute,” and not contractual.

IL Supreme Court holds HOAs “are a creature of statute,” and not contractual

Last month the IL Supreme Court opinion in Spanish Court[1] reversed the right of an owner to withhold assessments in view of the HOA’s failure to fix and maintain.[2] In its argument, frequently making use of pro-HOA activist and CAI CCAL attorney in Florida, Gary Poliakoff, the Court stated,

 

Although contract principles have sometimes been applied to the relationship between a condominium association and its unit owners based on the condominium’s declaration, bylaws, and rules and regulations . . . the relationship is largely a creature of statute, defined by the provisions of the Condominium Act. . . . Although these duties may also be reflected in the condominium declaration and bylaws, as they are in this case, they are imposed by statute and exist independent of the association’s governing documents. Accordingly, a unit owner’s obligation to pay assessments is not akin to a tenant’s purely contractual obligation to pay rent, which may be excused or nullified because the other party failed to perform. ¶ 21.

So much for the sanctity of the CC&Rs contract! The Court, guided not only by Poliakoff, but by a CAI amicus curiae brief,[3] rolls with the punches and chooses when and when not to uphold the contractual nature of the governing documents.

The Court avoided dealing with the equitable aspects of withholding assessments just like withholding rent, rejecting the favorable appellate decision that held,

[T]he obligation to pay assessments, and the obligation to repair and maintain the common elements, as mutually exchanged promises, and concluded that under principles of contract law, a material breach of the repair obligation could warrant nonpayment of assessments. ¶ 7.

Adding fuel to the fire, the Illinois Supreme Court followed the CAI propaganda that the HOA’s survival depends on assessments being paid immediately and without question.

This section [of the IL condo act] was adopted to provide a constitutionally permissible, quick method for collection of assessment arrearages. . . . The necessity of a “quick method” for collection of past due assessments, unencumbered by extraneous matters, is manifest when we consider the manner in which condominium associations operate . . . . the condominium form of property ownership only works if each unit owner faithfully pays his or her share of the common expenses. When a unit owner defaults in the payment of his or her assessments, the resulting forcible entry and detainer action is thus brought “for the benefit of all the other unit owners.” ¶¶ 29 -30.

Permitting a unit owner’s duty to pay assessments to be nullified would thus threaten the financial stability of condominium associations throughout this state. . . . For the same reason that taxpayers may not lawfully decline to pay lawfully assessed taxes because of some grievance or claim against the taxing governmental unit, a condominium unit owner may not decline to pay lawful assessments. Trustees of the Prince Condominium Trust v. Prosser, 592 N.E.2d 1301.” ¶ 32.

 

Here we have the alleged dicta [non-supported court opinions], and becoming part of the Illinois public policy, that the survival of the HOA/condo is first and foremost. The HOA rises to the same level as a public entity, with the questionable governing documents now having contractual validity and court support to deny homeowner rights, freedoms, privileges and immunities.

 

Welcome to the New America of HOA-Land.

References

 

[1] http://www.state.il.us/court/Opinions/SupremeCourt/2014/115342.pdf.

[2] See appellate decision Court decisions: HOA Enlightenment Movement vs. the Dark Ages.

[3] “Spanish Court Condominium Association II vs. Carlson (Illinois),” CAI Amicus Curiae Activity 2013.