No HOA reforms? blame it on the legislature

As of this morning, of the 16 Arizona HOA reform bills that I’ve been following, only 3 bills have a chance of becoming law: HB 2160, elections reform, HB 2170, HOA cannot charge escrow agents for fees, and SB 1239, zoning board prohibitions against mandatory HOAs. The 3 bills carrying penalties against wrongful acts by HOA boards, and holding the boards accountable, are all DEAD!

Except for the possible penalties in regard to elections, there are no deterrents to the intentional abuse and violations by the HOAs regarding fines, failures to provide corporate documents, or to respond to homeowner inquires in order to resolve payment disputes.

The absolute “sanctity of contract” argument by CAI lobbyists continues to be thrown at the legislators, and shamefully accepted by many. This acceptance by these legislators insults homeowners as it carries an implied attitude that homeowners are masochistic, and openly and fervently signed a solid contract to be treated harshly if they dare raise a question — the “a contract is a contract no matter what” excuse to deny your rights. Shameful!

Actually, if they had consulted their legislative council, there are indeed restrictions on the validity of covenants, — not everything goes. (Remember, we must educate the legislators otherwise they will continue to accept the “gospel of HOAs” from CAI, as taught in their “educational” indoctrination classes and seminars).

Covenants that are 1) contrary to public policy, 2) arbitrary and capricious, 3) unreasonable, and 4) unconstitutional are invalid no matter if they were approved by the membership. And that’s the whole point of the issue: HOAs and legislators cannot ignore the laws of the land and do as they please, in spite of what the CAI attorneys like to proclaim. But, some legislators actually believe in “everything and anything goes.”


Under these conditions, do not ask for assistance unless you have the personality and will to fight for your rights all by yourself, and are willing to spend your money to do the state’s job for them, JUST MOVE OUT! The laws and governing documents all favor the HOA against you and the rights that you thought could not be taken away.

Published in: on March 9, 2012 at 8:25 am  Comments (2)  
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2 CommentsLeave a comment

  1. Just moving out is now not an option for lots of people who have underwater mortgages. Such people really find themselves over a barrel when it comes to suffering the arbitrary abuses of HOAs.

  2. “of the 16 Arizona HOA reform bills that I’ve been following, only 3 bills have a chance of becoming law”

    How much time, effort, and political capital was expended on those 16 bills? How much was expended last year? How much will be expended next year? How long can the H.O.A. reform movement sustain itself with 80%+ losses (3/16 = 19%, 13/16 = 81%)?

    As long as H.O.A. reform advocates keep diluting their efforts trying to pass a multitude of bills that fix one small detail and micro-manage H.O.A.s, when so much needs to be done, H.O.A. reform will fail.

    Because the problem can’t be fixed by changing a few rules and regulations. The problem is that the H.O.A. system results in incredibly perverse incentives and moral hazards that benefit a few people at the expense of most homeowners. You can preach all you want about subjecting H.O.A.s to the Constitution or whatever, but that won’t change the nature of the sociopaths and bullies who currently run the system.

    H.O.A.s are fundamentally flawed. H.O.A.s are created for the benefit of developers and municipalities, not for the benefit of the homeowners. H.O.A.s operated for the benefit of property management companies and specialized law firms, not for the benefit of the homeowners.

    I believe what is needed is a single, sweeping reform that will put real power and choice back in the hands of the individual homeowners and create an incentive for H.O.A. corporations to stop abusing their members.

    One measure would be to simply abolish H.O.A.s, but that is politically unfeasible. And it is undesirable for other reasons (ie, freedom of association; there are some people who truly do want to be part of an H.O.A., and they should be allowed to).

    Conservatives and libertarians have long supported outlawing mandatory membership in a labor union as a condition of employment — what is known as “right to work”. It has been a plank of the Republican Party for as long as I can remember. The conservative/libertarian concern for workers’ rights trumps their belief in the sanctity of the contract. This is also how they can support “paycheck protection” legislation without worrying about state-interference in the contract between the worker and union.

    Simply take the conservative/libertarian position on workers and labor unions, and apply it to homeowners and H.O.A. unions:

    Prohibit mandatory membership in a homeowner association as a condition of home ownership.


    Every argument that conservatives and libertarians make to support “right to work” can be made to support my “right to own your home” idea.

    If homeowners have the freedom to leave their H.O.A. (without giving up their home), then H.O.A.s will have incentives to treat homeowners as a customer, rather than as a product to be farmed out to property managers and law firms.

    If a homeowner feels that he is getting value for the assessments (a.k.a. H.O.A. dues) that he is paying, then he will want to remain part of the H.O.A. If not, he should be free to resign his membership from the H.O.A. union. After that, the other problems will take care of themselves without micro-management by legislation or regulation.

    Of course, there will be the “free-rider” problem, but the same is true of workers who are not required to join labor unions. In both cases, right to work/own is infinitely preferable to requiring mandatory membership in a labor-union/H.O.A.-union.

    If enough homeowners feel that they are not getting value for what they are paying for goods and services, then the H.O.A. corporation will — and should — go out of business. That is how a free-market is supposed to work. Instead, legislatures and H.O.A.. reform advocates continue to insist on giving H.O.A. corporations preferential treatment as though H.O.A.s are Too Big To Fail ™.

    Learn more at my website,

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