Tag: US Supreme Court

Do we need a private, parallel government? Why?

The answer to the title question is a resounding, NO!  Here are the reasons why not. In essence, all those state HOA/Condo Acts and statutes establish and permit a parallel system of local government— that regulates and controls the residents within its borders —  to function outside the Constitution.

First, it’s time for state legislatures and the judicial system to acknowledge their   willful blindness[1] that the HOA legal scheme, with its insistence and reliance on  equitable servitudes, that “the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.”  

Professor Evan McKenzie said it quite clearly some 29 years ago in his 1994 book, Privatopia, “”CIDS [HOAs] currently engage in many activities that would be prohibited  if they were viewed  by the courts as the equivalent of local governments.”[2] It remains true today!

Second, Why are there private HOA governments when there is home rule, charter governments?[3] All the states have a version of home rule that varies in the degree of independence granted to a local governments and under what terms. Under the Home Rule doctrine local communities are permitted a large degree of independence even to the extent that state legislative action is not necessary. What is Home Rule? In simple terms, it is a grant of authority and power — of independence — from the legislature to local communities.

There are no legitimate reasons why HOA governed communities cannot exercise effective and productive self-government while  being subject to constitutional law under home rule statutes.

Third, Just what are the valid reasons for sporting and encouraging private government by the state?  Answer: there’s no legitimate and valid reason for private, local government to exist outside the constitutional framework.  Home rule doctrine existed long before the advent of the HOA legal structure in 1964. That is not to say that it would have solved all problems and be a perfect government, but it would be a government under the Constitution, part of the Union,  like all other forms of local government.  

The constitutionality of statutes is subject to the doctrine of judicial review and scrutiny.[4] I have yet to see any valid government justification in support of the HOA legal scheme that deprives citizens of their constitutional and fundamental rights, which requires meeting the strict scrutiny test. Under strict scrutiny, “the government must prove that the challenged law is both narrowly tailored and the least-restrictive means available to further a compelling governmental interest.”

To argue, as have the states and pro-HOA supporters, that state and local government have an interest in reduced expenditures and the establishment of desirable community living does not carry weight. There are valid arguments that the HOA legal scheme denies fundamental and constitutional rights under the 14th Amendment,[5] which requires the application of strict scrutiny.  It has not been tested!

It is no wonder that state legislatures, CAI, and pro-HOA supporters avoid the issues of HOAs as de facto governments, and questions of judicial review.

The 64-dollar question is: Why do HOAs continue to exist and grow? Could it be, like drugs, there is widespread demand? Or is it because of the collaboration — as a group functioning as a monopoly[6] —   of CAI, the builders/developers, real estate agents, etc. to restrict housing solely subject to private governments? Is housing in HOA-Land equal to public, free-market housing?

Adopting the US Supreme Court’s decision in Brown,[7] “’separate but equal’ has no place. Separate educational facilities are inherently unequal.” Separate HOA/condo housing under private governments is inherently unequal and a violation of the 14th Amendment’s Equal Protection Clause.

The answer will be more discussed in more detail in a subsequent commentary.

NOTES

[1] Willful blindness is a legal concept that describes the state of deliberately ignoring or avoiding facts that would make them liable for a wrongful act. 

[2] Evan McKenzie. Privatopia: Homeowners Associations and the Rise of Private Residential Government, Yale Univ. Press, 1994.

[3] See America’s homeland: HOA law vs. Home rule law.

[4] See Judicial Scrutiny standards judge claims of constitutionality

[5] In general, see Desert Mountain opinion (AZ) constitutionality – part 2,  and Law review on CC&Rs constitutionality – part 1.

[6] A monopoly can be “a company or group having exclusive control over a commodity or service: ‘areas where cable companies operate as monopolies.’”

[7] Brown v. Bd of Education,  347 U.S. 483 (1954).

NC foreclosure bill SB 312 dies silently

I had sought for a representative example of emails to the legislators  and copies of proposed testimony before the hearing committees that I would review and add constitutionality challenges. Having received none from the advocacy group, I found the following event an excellent case to demonstrate the need to apply constitutional law.

A 2023 NC bill taking strong stand on HOA foreclosure rights. It was a bill containing above and beyond restrictions and actions on filing liens for failures to pay assessment.  It was read and sent to the rules committee in March without being assigned to any hearing committee, as is SOP. As I explained in “Understanding the Legislative structure,” the Rules Committee is controlled by the majority party leaders and can hold a bill from being heard, which it appears has happened.

My review and analysis rests solely on the following. The bill had good intentions but lacked any real support or concern from the bill sponsor.  It simply deleted all references in the NC General Statutes granting the HOA rights to foreclose on” dead beats.” I am not aware of any social media or news media coverage of this important bill.

In general, my recommendations on preparing and supporting favorable legislation are presented in Legislative proposals and legal memoranda, but here I apply those recommendations to this bill.

First, in a highly controversial bill as we have here, the sponsor should have included an Intent section that provides the rationale for the need for the bill to be made law. Even if not passed, the Intent section becomes part of the legislative record otherwise silence reigns.*  A host of legal authority failed to be presented to the NC General Assembly that, among other violations, raised constitutional issues of violations of the 8th Amendment against cruel and unusual punishment.

Of particular authority – persuasive authority in the courts – that carries strong weight is found in the Minnesota decision: Supreme Court finds taking excess foreclosure funds unconstitutional. 

“She brought ‘claims under the Takings Clause of the Fifth Amendment and the Excessive Fines Clause of the Eighth Amendment.’ . . . Because we find that Tyler has plausibly alleged a taking under the Fifth Amendment [eminent domain] . . . we need not decide whether she has also alleged an excessive fine under the Eighth Amendment.”

For a discussion of foreclosure injustice, see HOA Common Sense, No. 8: Draconian punishment and intimidation. Also see the 2019 SC bill analysis, Substantive SC HOA reform bill – end foreclosure.

 “The Eighth Amendment’s Excessive Fines Clause is an incorporated protection applicable to the States under the Fourteenth Amendment’s Due Process Clause. . . .  The Fourteenth Amendment’s Due Process Clause incorporates and renders applicable to the States Bill of Rights protections “fun­damental to our scheme of ordered liberty.”

Now is the time for all good advocates . . .

The NC legislature is still in session and bills are carried over to the following year in NC’s biannual sessions.  With a strong outcry from NC citizens and advocates the Rules Committee can place this bill back into play by assigning a hearing committee and allowing for a vote; if not too late this session then next year. (See Understanding the Legislative structure).  Support by the Sponsor, Senator Kandie Smith, is a strong endorsement.

The ball is in the NC advocate’s court.

Media fails 1st Amendment free HOA speech

The media has failed its First Amendment prerogative of protected free speech. The Founding Fathers well understood the need for an informed citizenry for a healthy democracy and made free speech the 1st Amendment. However, America has become divided and the courts, including the Supreme Court, have adopted a policy that biased, personal agenda speech is OK because America has many channels for opposing speech. For example, FOX  News and MSNBC.

But the media has silenced the opposing views of HOA members themselves.

The Supreme Court (New York Times Co. v. Sullivan (1964),  with respect to newspaper articles, held:

“In the case of the newspaper that published inaccurate information, that form of speech would not be protected by the First Amendment if the newspaper published falsehoods knowingly and purposefully. . . . The Supreme Court ruled that the newspaper was constitutionally protected in this instance, despite the false allegations, since the newspaper did not knowingly and recklessly publish the inaccuracies.”

In response to a call for a media contact committee by HRLNG (FB) I wrote today:

“This has been a long-neglected point of power for advocates, realizing that the media is part of what I’ve designated as, “the unspoken alliance of NO HOA negative stories.” Ask yourself, recalling all the TV anchors telling you that they ask hard questions, they get to the facts, etc. yet nothing bad about HOAs that amount to substantial issues. Yes, they talk about this incident and that incident, but substantive issues go ignored. This must be the substance of your approach! Example: NAR and all state chapters claim they are here for you the home buyer and you can trust your Realtor (This term is the NAR members only). BUT HOA??? What’s that??

“The Homes Association Handbook, the 1964 “bible” for HOA-Land was supported by that version of NAR. AARP had some articles but no lobbying for its age 50+, members. Why not? This committee must not be afraid to ask these hard questions. What do you have to lose? They did very little for HOA reforms. CHALLENGE THEM and ask hard questions in pursuit of the truth!”

Court requires constitutional due process in HOA foreclosures

The enlightenment and awareness that the US Constitution and its due process requirement extends to private government HOAs is gaining momentum. ”The writing is on the wall.”

In the recent Colorado appellate decision in Hummel (C&C Investments v. Hummel, 022COA42, April 14, 2022)  concerning proper notice of homeowner foreclosure by the HOA, the court surprisingly acted sua sponte —in the name of justice. The courts have repeatedly failed to invoke, in the pursuit of justice as it claims to be its fundamental purpose, its right to act sua ponte — on its own — raising discussions of issues not raised by either party.  

In Hummel the question arose as to whether or not the homeowner was given notice of impending foreclosure action by the HOA.  The HOA send a processor server who said he posted the notice in the newspaper, which is allowed under certain circumstances. She discovered her plight only when an eviction notice was pinned to her door. The question be determined was, What is proper, legal service?

While court rules require that the HOA serve notice, the court held that it “must also meet the mandates of due process before foreclosing on an individual’s property” and that,

“[I]t is not unreasonable to require a homeowners association to make a good faith, rather than a highly technical, effort to effectuate actual notice to a fellow neighbor before foreclosing on their property.”

In support of its opinion, the Court referenced the Colorado appellate court’s court view:

“Although an association is not the government, it serves “quasi-governmental functions” when enforcing covenants and must abide by the due process requirements of the United States and Colorado Constitutions.“

“[T]he United States Supreme Court has long held that when foreclosing a lien against an individual’s home, due process requires “notice [that is] reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.”

The appellate court found that the trial court failed to adhere to these principles before ordering a default judgment.

Stare decisis – promoting bad HOA statutes

Stare decisis is the long-held doctrine underlying precedent or following and upholding existing laws.  And if the laws are bad, well then, so are any new laws based on the bad precedent. Those of us as homeowner rights advocates are well aware of the harmful impact of stare decisis on homeowners.  See Rejecting unjust HOA legal precedent (2010).

Stare decisis was a very big issue in today’s SCOTUS hearing on Roe v. Wade.   Should this long held precedent be supported or not followed for reasons of “bad law” as argued by some.  The principles governing  stare decisis are, as should be expected, very complicated, so here’s the short of it as best I can determine.

Alexander Hamilton explained that “[t]o avoid arbitrary discretion in the courts, it is indispensable that they should be bound down by strict rules and precedents.”   But it is not a “mechanical formula” or “not set in stone.” The issues dealt with “strong grounds” because “the Court’s willingness to overrule its past decisions is the only way to correct an erroneous constitutional interpretation.”  Was the precedent wrong in the first place (as now being argued with Roe)?  Whether “less harm will result from overruling the decision than from allowing it to stand?

Advocates must make the courts realize that most of the HOA statutes in every state must be overruled on constitutional grounds.  Otherwise, homeowners will never be able to rise out of the muck and recapture true US citizenship.