HOA statutes as indirect government acts – Part 2

As a second thought, I wonder how Judge Downie would rule on the constitutionality of the entire CC&R legal scheme?  Where covenants are embedded in the common law of equitable servitudes running with the land, and where private parties are permitted to trespass upon constitutional rights and freedoms.   Would she rule them to be a devise to circumvent the US Constitution? Or would the Judge permit the State to do indirectly what it could not do directly?[i]  By allowing and permitting these private “contracts”, isn’t the State doing an end-run around the prohibitions and restrictions of the Constitution on government entities? 


Let’s examine how this indirect circumvention works.  In constructing and interpreting laws, the terms “shall” and “may” are clearly defined to distinguish a State mandated act from a discretionary act by the actor.  In many HOA statutes one find’s the term “may” when pertaining to an act of the board, such as when issuing fines.  In a few instances the term, “shall not” is used to prohibit an action, such as “the association shall not impose a fine . . . .” (ARS 33-1803(A)).  In a few instances the legislature does mandate a legally binding condition when it defines or declares an event, such as, “The association has a lien on a unit for any assessment when . . . .” (ARS 33-1807(A)).  However, the term “may”, although not prescribing a mandatory act or action, does carry a legal construction or interpretation that  “denotes permissible discretion[ii], and “‘May’ is permissive and confers a privilege or power. Normally the use of ‘may’ implies discretion or permission.[iii]


Now, under the Ninth Amendment to the Constitution, rights not enumerated are “retained by the people“, and under the Tenth Amendment, the powers “are reserved to the people” if not delegated to the federal government or prohibited by the States.  The people have the power, and retain undeclared rights.  Often, when a dispute arises to challenge and clarify the legality of an action by the people, like, can an HOA fine a member, it often falls to the legislature to issue its standing on the matter, and either declare the act legal or not legal.  When the statute contains the word “may”, then the legislature is pronouncing the act or action as being not illegal, as consistent with the general good of the people and consistent with good public policy.  Otherwise it would use the term “may not” to prohibit and to declare the act illegal.  In other words the legislature has sanctioned or “blessed” the acts of private parties as legal by the very nature of the use of the term “may.”  (Similarly when a court rules that the act is not illegal).


Thus, the use the term “may,” in regard to discretionary board actions within a statute,  regulates who can or cannot behave, and/or the what or how-to of that behavior. In doing so, the legislature has declared the act not to be illegal, and not to be a violation of the Constitution (all statutes are presumed constitutional).  And, therefore, in the broader, cumulative picture, the legislature has declared that these private CC&R “contracts” are valid.  The legislature has declared that these bona fide governments, obviously not recognized as such by the State, yet functioning with more authority than granted to many incorporated villages and towns, are permitted to do what it, the government, cannot do directly.  HOA regimes are the surrogate entities of the State. The legislature has allowed and permitted these private agreements to circumvent the US Constitution.[iv]   The legislature could have said “may not.”  


In answering the question posed earlier, Judge Downie would not declare HOA private constitutions as a devise to circumvent the Constitution!  Judge Downie would allow the legislature to do indirectly, by means of sanctioning HOA statutes, what it cannot do directly under the prohibitions of the US and Arizona constitutions.

 Qui Pro Domina Justitia Sequitur  (“who prosecutes on behalf of Lady Justice”, DOJ seal)


[i] Elrod v. Burns, 427 U.S. 347 (1976), “Since the government, however, may not seek to achieve an unlawful end either directly or indirectly . . . .”

[ii] Preamble, Arizona Rules of the Supreme Court, Part VII, R. 81 (2006).

[iii] “Use of Shall, Must  and May”, § 5.31, Arizona Bill Drafting Manual (2009) (Oct 11, 2009).

[iv] This is the greatest fear that evokes the strongest reaction from pro-HOA supporters, especially the national business trade group, CAI, whose members have immense influence and control over these private governments. The admission that HOA regimes are political governments and/or state actors is feared by CAI as a slippery-slope path to the severe curtailment of their power over HOAs, subjecting them to state accountability and oversight regulation.

Published in: on October 14, 2009 at 11:34 am  Leave a Comment  

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