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).

On stopping HOA bullies and rediscovering lost values

Excerpts of guest blogs by George Staropoli on Ward Lucas’ blog, Neighbors at War!

 

Rediscovering Values

For a society, a community, to function in an orderly manner there must be not only rules, but a firm belief in the need to enforce just and fair rules and laws. Political philosophy says that where laws are unjust and unfair, then the democratic government is not legitimate, cause the reason for forming a social contract and surrendering freedoms is just that.

On Stopping Bullies

Proposed HOA reforms must include necessary and sufficient detriments to put an end to HOA bullying and abuse. People do not become angels when they become a board member, like our astute, politically savvy legislatures would like you to believe.

 If angels were to govern men, neither external nor internal controls on government would be necessary.  James Madison, The Federalist Papers, # 51.

 

 

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.

 

Published in: on April 24, 2014 at 7:05 pm  Comments (2)  
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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).

A lesson in HOA reforms and power politics in AZ

 

For those who still believe that HOA reform legislation is not political, and in particular not power politics, take heed from the following analysis of events at the Arizona Legislature.  It deals with SB 1454 reborn as SB 1482 this year and substituted for the identical bill, HB 2695.

It begins at the start of the session when no bills were introduced to repeal the statutes found invalid in last year’s SB 1454 by the court.  Calls to the Senate President and Speaker of the House, and Secretary of State, to correct this seemingly oversight went unheeded. That was puzzling to say the least.

First, SB 1482 was introduced by Senator Griffin and amended, and passed unanimously by the Senate. It sat in the House for an unheard of 7 weeks until this week.  It past the deadline for being heard in a committee of the House, per the rules, and was presumed dead.

Second, HB 2695 was introduced by Rep. Ugenti for the fourth incarnation of the “omnibus HOA bill.” It was also amended and made identical to SB1482. It passed the House Committee of the Whole (COW) over 4 weeks ago, but was not put on the final vote agenda giving the illusion that it was dead. It passed the deadline to be heard in the Senate.

Neither bill could be heard in the other branch, according to the usual rules.

Finally, after the budget negotiations were resolved this week, a few bills were attended to that included the presumed dead HB 2695. It was ready for the final vote this week.  Why now?  That wouldn’t help because it could not be sent to the Senate for a vote since that deadline, too, had past.

So, the clever plot unfolded when SB 1482 was substituted HB 2695, in compliance with the legislative rules, because it had already passed out of the Senate and there was no need to go back to be voted on all over again.

All in time to withstand a possible Governor’s veto as the session will not end before any veto. This allows the legislature to override the veto because it has more than a 2/3 approval of both houses.  It was all carefully planned out and timed!  The bill was passed 49-6 with 5 NV.

Why the theatrics is not clear.  Didn’t have the votes and had to wait?  I believe that the timing is too coincidental, and reflects a successful plot that demonstrated the power of the HOA stakeholders over the legislature. You know, let them think they won and we will stick it to them for last year’s law suit.  We will show them who’s boss!  Not unexpected based on Ugenti’s prior behavior and attitude.

Published in: on April 14, 2014 at 4:09 pm  Comments (7)  
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