HOAs: 'command and control regimes' under questionable consent

Excerpts from VII. Conclusion.

That particular paradox has been the source of considerable confusion and misunderstanding. For too long, conventional wisdom has been that CICs are nothing more or less than the product of market forces, and that the elaborate CIC servitude regime is nothing more or less than a market response to consumer demand. This received wisdom ignores the realities of several distinctly non-market phenomena, including the pervasive privatization policies of local governments and the self-interested motives of CIC developers, that are at variance with the best interests of CIC homeowners. It also fails to respond meaningfully to gaps in resident consent to the CIC servitude regime in the first place. Those market distortions have played a critical role in sustaining less than desirable rule-bound CIC templates. One consequence is that the status quo CIC paradigm cannot be justified as the inevitable product of market forces or consumer choice. In fact, we have argued the contrary to be true.

. . . .

In particular, we propose a new legal foundation for CICs composed of the following elements: (1) a new set of governance choices based on a sunsetting of the developer-imposed servitude regime after the developer relinquishes control of the CIC; (2) a series of clear statutory rights for residents; (3) a fair, equitable and affordable alternative dispute resolution regime; (4) an ombudsman with a mandate to resolve homeowner issues before such issues metastasize into full-blown wars; and (5) the imposition of systems of transparent management and accountability.

. . . .

Ultimately, CICs must be afforded the opportunity to shed their command-and-control rule regimes in favor of templates aimed at reinforcing norms of basic neighborliness. This way, similarly situated residents, all of whom share the goals of minimizing their own transaction costs while preserving and protecting their property values, are given the chance to live the essential wisdom of “self-interest rightly understood.”

Paula A. Franzese and Steven Siegel, Trust and Community: The Common Interest Community as Metaphor and Paradox Vol 72, Missouri L. Rev.,  1111,  2007. 

Steven Siegel

1.  Co-author of AARP amicus brief to NJ Supreme Court in the 2007 Twin Rivers HOA free speech appeal.
2.  The Constitution and Private Government: Toward the Recognition of Constitutional Rights in Private Residential Communities Fifty Years after Marsh v. Alabama, Wm & Mary Bill of Rights J., Spring 1998.

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Published in: on March 10, 2008 at 9:07 am  Leave a Comment  

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