When do unlawful intentional HOA acts become extortion?

Many complaints against HOAs and their management firms have dealt with what can easily be described as intentional disregard of the governing documents or state laws.  Intentional disregard, under a duty of care that results in damage to another, can also be viewed as gross negligence. I am speaking about, for example, 1) failing to respond to legitimate inquires regarding HOA records, especially when there is a dispute over the amounts of money supposedly due the HOA, 2) failing to provide the facts underlying the alleged act constituting a fine, or 3) violations of meeting laws and elections procedures. 
Whenever the “black letter” wording of the laws governing documents are violated with respect to any action, impending action, or threat of impending action, including taking the homeowner to court,  the actions can be viewed as extortion when the actions attempt to obtain any property, either money or real property.  This “black letter” condition is important since the HOA will attempt to defend itself by claiming that it had the right to so act under either state laws or the governing documents.  In other instances, the homeowner would have to show that the HOA had abused its discretionary authority, which is a more difficult task.
It is inexcusable for an HOA board or management firm not to know the laws, or check them when in doubt, before taking any such action that demands money — assessments, fines and other fees and costs, including attorney fees from a homeowner.  Or to permit directors or the management firm to subject a homeowner to emotional stress, contempt, ridicule, or defamation.
It is inexcusable for HOA attorneys to not obtain supporting evidence of the HOA claims as required under ethical rules and the Rules of Civil Procedure of their state — R11(a) in Arizona — that permits a lawyer to take court action only when “to the best of the [attorney’s] knowledge, information and belief formed after reasonable inquiry [the claim] is well founded in fact and is warranted by existing law . . . .”
Black’s Law Dictionary defines, in general, extortion as,”The act or practice of obtaining something or compelling some action by illegal means, as by force or coercion.”   The courts require that a plaintiff meet, prove, the requirements set forth in the applicable statute for a violation of the statute. For example, your state has a definition similar to that of Arizona, which requires a homeowner to prove “any” of the 8 listed actions.
ARS 13-1804. Theft by extortion; classification (excerpts; emphasis added)

A. A person commits theft by extortion by knowingly obtaining or seeking to obtain property or services by means of a threat to do in the future any of the following:

3. Cause damage to property.
4. Engage in other conduct constituting an offense.
5. Accuse anyone of a crime or bring criminal charges against anyone.
6. Expose a secret or an asserted fact, whether true or false, tending to subject anyone to hatred, contempt or ridicule or to impair the person’s credit or business.
8. Cause anyone to part with any property.
Published in: on March 10, 2010 at 8:16 am  Comments (1)  

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One CommentLeave a comment

  1. I can’t say I completely agree on certain thoughts, but you certainly have an interesting point of view. Anyway, I enjoy the quality you bring to the blogosphere and that this isn’t just another abandoned, made-for-adsense blog! Take care…

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