CLRC proposed HOA law changes: response and rebuttal

April 13, 2008

 

Brian Hebert

California Law Revision Commission

 

Email reply to CLRC email questions (see below) regarding my email letter of April 11, 2008 on AB1921

 

I am surprised at your response to my broad email message that narrowly asks about constitutionality problems.  Perhaps you misunderstood my email letter that indicated several areas that warrant further analysis as to violations of due process and equal protection of the laws, supported by legal authorities.  CLRC, as part of its mission, should become familiar with the homeowner rights resource material references provided to CLRC before drafting any revisions to the laws.  If this is beyond the ability of CLRC, then it should recommend to the legislation that an independent study committee be funded to resolve these important questions and await the outcome.

 

Perhaps the CLRC members should view the video documentaries of the Florida House Select Condo/HOA Committee hearing in Tampa, FL this past Feb. 23rd.  These excerpts from the hearing demonstrate the committee’s intent to protect homeowner rights by questioning condo boards and attorneys, under subpoena, as to their refusal to comply with the law. Visit the HOAGOV Channel on YouTube at http://youtube.com/hoagov and select the “FL-select” videos. (You will also find other video documentaries including the oral arguments made before the NJ Supreme Court in the Twin Rivers HOA free speech case).

 

My first reaction to your short letter, with its focus on “what constitutional rights”, was a recall of a similar statement contained in Evan McKenzie’s 1994 landmark book, Privatopia:

 

Residents in CIDs commonly fail to understand the difference between a regime based formally on rights, such as American civil governments, and the CID regime, which is based on restrictions.  This often leads to people becoming angry at board meetings and claiming that their “rights” have been violated – rights that they wrongly believe they have in the CID.   This absence of rights has important consequences because the balance of power between individual and private government is reversed. (p. 148).

 

If CLRC missed my message on the failure of the state to protect the rights of citizens, and that of McKenzie, too, allow me to quote the Declaration of Rights: 

 

SECTION 1.  All people are by nature free and independent and have inalienable rights.  Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.  

Do you not agree with my recommendations that AB 1921 explicitly include appropriate parts of the Declaration of Rights?  Of course, CLRC may take the position that all legislation is presumed constitutional, and that the homeowner, indeed, has no rights since it is the state alone that determines what rights he has.  This seems to be the view of homeowner rights adopted by CLRC with its submission of a blank bill of rights chapter, giving rise to CLRC being the gatekeeper to any discussion by the legislature of the just and fair treatment of its citizens. Has CLRC also become the gatekeeper of what affirmations of the California Constitution should become part of Davis-Stirling?  Or the gatekeeper of restricting CC&R covenants and agreements in order to protect the rights of the people to the fair and equal treatment under the law?

 

As to your specific concern about foreclosure, I will indulge your short question with a “for the purpose of clarification” answer, knowing full well that the problems of the CID scheme will not be solved by our short exchange, and should not be.

 

First, what is the state’s interest in allowing CID foreclosures?  It appears to be a “ratification” of the private Declaration agreement, and as such, subject to claims of contract interference.   I am raising the issue of statutes, and not of any private agreement, and why the state has gotten involved.  One thought is that there are problems with this private arrangement and that the state must give its imprimatur and “blessing” in order to protect the private arrangement. If so, then the CID is clothed as a state actor.

 

Second, what funds were exchanged between the homeowner and the CID to warrant this right to foreclose?  The CID has advanced none of its funds, as a bank or mortgage company, in exchange for the home as a security.  Rather, the CID has been positioned as the equivalent of a government entity and allowed to foreclose on the basis of a failure to pay its “taxes”, or assessments that are made to pay for the general services of the CID.  Again, just like a government entity and not a bank.  One could argue special laws, or special privileges and immunities to private organizations, or any of several violations of the Declaration of Rights.

 

Third, let’s consider the ratio between the debts actual owed the CID and the price of the property that is taken from the homeowner.  Very often it exceeds the US Supreme Court’s guidelines of a suggested 10 to 1 ratio for punitive damages in insurance claims, above which may be considered cruel and unusual punishment.  And let’s not get involved with the excessive monies from foreclosure that go to the attorney for the CID and not to help the CID get along and survive.  And let’s not forget that this is not for any repayment of funds advanced by the CID.  And, that the “bonus” money arising from fines and penalties are punitive to hasten payments and a detriment to further failure to pay.  Foreclosure is purely punitive in nature, and has been allowed to be excessive at that!  Is this a fair, just and equal treatment of the homeowner?  Is this good public policy? Or is it state protection of a private organization, and the clothing of the CID as a state actor?

 

Let me repeat. This is not the venue to solve all problems with the CID scheme.  It is, however, for the legislature to act in accordance with the California Constitution. It is for CLRC to recognize the legislature’s duties and obligations under the constitution to protect its citizens, and to provide a balanced bill for proper consideration by the elected representatives of the people. 

 

George K. Staropoli

Citizens for Constitutional Local Government

 

———————————————————-

George,

 

In order to help me better understand your position, would you mind pointing out some specific examples of how an association would violate a member/owner’s constitutional rights? 

 

If the same sort of situation could arise in a landlord/tenant relationship, please explain why the situation would be unconstitutional in an HOA, but constitutional in a simple rental (or if you think it would be unconstitutional in both situations, why that would be). 

 

If the example involves foreclosure, please explain how it is unconstitutional for an HOA to foreclose, but constitutional for a bank to foreclose.

 

Thanks.

 

California Law Revision Commission

 

 

Brian Hebert 

 

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Published in: on April 15, 2008 at 5:55 am  Leave a Comment  

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