Part 2 – Is there an ideal HOA constitution?

THE TASK – PART 2

A reader of my HOA Constitutional Government blog asked the following questions:

1. In your opinion, what constitutes a reasonable set of covenants that protects the rights of homeowners while enabling a HOA to manage and maintain the common areas, facilities and character of community?

2. Another way of asking the same question: if you had the opportunity to write the Declaration and Bylaws for a new community, what would be in it; what would not?

AS TO THE SPECIFICS OF THE NEW HOA ORDER

As to specifics of covenants or “laws”, that must remain a matter for each community to determine once adherence to the Constitution is put into being. However, proposed covenants must pass muster under the Constitution, under the state’s Declaration of Rights, and under existing applicable laws. No more, “It doesn’t say so in our private contractual agreement.” Yes, if you still want good, decent private government, then you must have good, decent and skilled private government officials. Or leave it to your municipality. If people don’t get involved and remain apathetic, this is a sign that they really don’t care, that they aren’t willing to “put their money where their mouth is” in support of the HOA society. The community, the society has failed. If you try to force compliance, then you will regress back to the existing HOA regime’s “modus operandi.” That is the nature of such societies, either utopian in nature, or just monetary in nature to protect property values.

And, the Restatement of Servitudes, the massive 2000 revision, must be examined in its entirety to remove equitable servitudes as the basis of planned communities (see, Social Contract) and return the supreme law of the land as rightfully being the Constitution. (“The question whether a servitude unreasonably burdens a fundamental constitutional right is determined as a matter of property law, and not constitutional law”, Sec. 3.1, comment h). We cannot undo precedent, upon which the restatement seeks to summarize into guiding principles of law, but we can strip it of commentaries and personal views by the legal-academic aristocrats who have deviated from the protection of individual property rights and freedoms, which serve as the backbone of America and the US Constitution. For example, the Restatement in Sec. 6.16, comment b, says, “the rule in this section states that the board has all the powers that are not expressly reserved to the members”, quite contrary to the Constitution. Where are the powers reserved to the members that the CC&Rs protect? Or the homeowners rights that the HOA cannot infringe upon? Where?

But, before specific covenants can be advanced, we need effective and fair laws that protect our “guaranteed” rights. In other words, a reasonable set of covenants would need to include a statement to the effect that “the HOA shall at all times be subject to the 14th Amendment, and to the same statutes, laws, codes, and common law that municipalities are subject to, as if it, too, were a public entity.” With this covenant, there would be no need for separate and less restrictive HOA open meeting laws, or separate freedom of information acts, or bona fide due process, etc , while including election laws, and the necessary penalties against HOA violations of the law. No more free ride!

Understand that all of these protections can happen while the association’s unique rules (ordinances), or restricted use of amenities for members only can remain, so long as they do not violate existing laws and your rights under those laws. It’s up to the residents to create their society, for better or for worse, as the see fit in their community. This means things like bylaws, and quorums, or pool rules or painting schemes, are all local, neighborhood “ordinances”. No more “anything in the governing documents to the contrary notwithstanding” or “this section applies unless the governing documents say otherwise” verbiage in the laws to confuse the people. What a waste of time and effort!

As part of meeting the public government law requirements, proper and fair disclosures to prospective buyers is a must! Today’s so-called disclosures are inadequate because many material factors, the negatives in particular, are not mentioned — they are still primarily regarded as selling tools. The HOA supporters believe in the old adage, “What the people don’t know won’t hurt them. Trust me!” Education is very important because the only education the public gets today comes from the pro-HOA special interests, mainly CAI, who are extremely biased toward selling HOA communities. We know HOA governance is markedly different from public government, but no educational seminars or public school civics or history classes cover these differences, nor are these differences the subject of political talk show discussions.

I realize that some do not like having their local municipality laws affecting their community. And this is one of the arguments advanced by pro-HOA supporters for local government rule, but mechanisms already exist in law to create separate local municipalities or self-government “islands”. The difference would be the absence of a developer contract imposed on residents and one drafted by the residents themselves that treats the new entity as a public entity.

AS TO THE ADOPTION OF THE NEW HOA ORDER

The final major concern to be addressed is creation of our new HOA world, or the modification of all those existing HOA regimes to conform with the principles set forth above. Remember, successful utopian or “specialized” societies are the result of a relatively small group of loyal followers pursuing a vision that can retain the loyalty of succeeding generations. (Now you see why mandated membership was necessary for the survival of HOAs). With respect to forming a new community, how does the group, never mind having a profit-seeking developer concoct, a priori (before hand, as is the current case), create a vision for acceptance by the residents and subsequent new residents? And still only have dedicated and devote buyers admitted to or allowed to purchase a unit in the community? It can be done, but, in order to be successful without 45 years of continuing major, inherent problems (since 1964, see the Foundations of HOAs), it cannot be based on a mass merchandising scale. How else can the utopian HOA society continue to survive in accordance with the vision, as intended?

A much larger, and impossible, approach is any attempt to convert existing HOAs to the new HOA order. Keeping with the above principles, that would require 100% agreement with the new district-HOA charter. Anything less invites chaos, as exemplified by the division of India in 1948 between a Hindu state and a Moslem state. Who pays assessments or “usage fees”, and uses the amenities? Who is bound by the rules and regulations and architectural requirements? Do we force a move of residents into member and non-member parcels as occurred in India in 1948? Even a 100% concurrence with a statement signed by each current member, whether or not “in good standing” per the CC&Rs, that he/she will abide by the will of the majority is a very difficult undertaking. Care, of course, must be taken to provide assurances and guarantees that the member’s rights and freedoms will not be taken away without the same due process protections available to the public at large. You cannot do any more or better, but to place all citizens on an equal basis before the law. (“Equal Justice Under the Law” is inscribed on the facade of the Supreme Court building).

In the same manner as conducted by the Continental Congress that drafted the US Constitution, any new charter must be distributed to all affected parties, debated, and voted on. That is why, in all practicality for the mass merchandising of HOAs, the take-it-or-leave-it CC&Rs was the only way to structure the HOA, which also had to contain covenants granting wide powers to the governing board, restrict individual rights to ensure conformity, grant very little rights reserved to the homeowner, and compel the payment of assessments.

In order to accomplish this task of accepting the new district-HOA charter, a large-scale educational process would be required. A simple statement, “I am in favor of maintaining property values”, is meaningless. In all practicality, an incremental approach to reach rapprochement with the Constitution may work on a limited basis, starting with those amendments to the CC&Rs that would have the broadest impact, such as the recognition that the HOA is equivalent to a public entity and is subject the relevant laws as a municipality. While the mindset of the members needs to be changed, there will be those who embrace the HOA as it exits today. What to do with them?

Perhaps “consumer choice” will finally arrive with the advent of the new HOA order communities, provided that local government sees the light and stops mandating the old regime system of governance. Then members can choose to move out, as the discontents are always told, and choose the new order. This may be the most workable approach. I am only guessing. But, any change cannot happen without a change in the statutes and a change in the attitudes of the legislators, who must also be educated.

The choice is before each and every HOA member, and the home buyer. He can choose the New America way of life and remain living outside the “American Zone”, as Host of the internet talk radio show OnTheCommons, Shu Bartholomew, informs her listeners. Or you can choose to remain under the American system of democratic government. If you chose to remain, as argued above, then you must speak out, and actively and monetarily support those leading the way. You must challenge those still promoting the old regime with their half-truths and misleading statements. Advocates must be determined and focused, and not haphazardly run around reacting to the moves and events created by the special interests, as occurs today. Advocates must be united and proactive on a national basis with a national program.


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Published in: on September 26, 2009 at 8:10 am  Comments (1)  

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  1. […] See generally, Part 2 – Is there an ideal HOA constitution? Tags: linkedin AZ court ends open-ended “ex post facto” HOA […]


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