HOA board mentality and unconscionable CC&Rs rewrites

Homeowners living in HOAs must decide what side of the fence they are sitting on!       Whether on the side of management or on the side of the rank and file homeowner?  There is a major difference as the HOA is not a democratic community government, but a corporate form of government.  And never has a corporate form of government been described as democratic.

The business parallel of “management vs. employees” in HOAs is alive and well. Management represents the HOA entity and not the members, just as management represents the stockholders and not the employees.  Legally this fact is found everywhere.  And the HOA attorney who advises the board and rewrites CC&Rs and amendments represents management and not the interests of the members.  How many times have you seen and heard “for a more productive and effective HOA” and “for the benefit of all members collectively”?   Sounds nice, but the two are not equivalent.  The board does not speak for all the members and that’s why there is member voting.

A most egregious and unconscionable act by the board and its attorney can be found in the broad rewrite of the CC&Rs where liberties are taken in favor of the HOA.  Where the homeowner again unknowingly waives and surrenders his rights and freedoms to the HOA, because the homeowner rank and file does not hire their own attorney to explain the impact of the HOA changes.

An example of how far this unconscionable activity can go involves the rewrite of CC&Rs by an Arizona CAI member attorney firm, and member of CAI’s College of Community Association Lawyers (CCAL).   In the rewrite the attorney deleted “reasonable” with regard to attorney fees and added “all”.  The attorney also did not adopt the “prevailing party” widely accepted standard of fairness, but mandated the homeowner to pay its fees regardless if the homeowner wins.  In other words, even if the homeowner had brought suit against HOA wrongful behavior and wins, he must still pay the HOA attorney fees.  Covenants that are unconscionable and against public policy are held to be invalid.

Additionally, a festering issue at the Arizona Legislature has been the awarding of attorney fees by the Office of Administrative Hearings (OAH).   The attorney uses the term “administrative law judge” as most homeowners would know that OAH does not pay attorney fees.  This blatant “squeeze it by and maybe they won’t notice” tactic is disgraceful.  Yet, in 99% of the cases heard at OAH the HOA has decided to hire the unnecessary attorney.  The HOA should pay for this unnecessary decision.

And yet many homeowners would go along with this “stick it to the homeowner” mentality.   Presumably because they see themselves not as the “homeowner” at issue, and therefore it doesn’t affect them.  But, the rewritten covenants apply to them, all of them.  And it also applies to the directors and officers who believe that this unconscionable conduct is good for the HOA in the long-term, and that it also doesn’t apply to them.  But, unjust and unfair covenants that openly serve the interests of their attorney cannot be seen as in the best interests of the HOA.

Homeowners in HOAs must decide where they stand.  For their rights or for unconscionable conduct and acts of bad faith by the HOA board and its attorney who is not your attorney.

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Published in: on November 2, 2012 at 4:20 pm  Comments (3)  
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3 CommentsLeave a comment

  1. Simply put muncipalties are unwiling and unable to sustain the financial bureden of parks and ammenities that master planned community may be able to provide. Its a sad fact, at least in the state of Arizona, that muncipal parks are becoming a discretionary spend item at the expense of it’s citizens. There is no state constitutional mandate which gurantees it’s citizens the use of parks, or lakes or pools, ect. Some HOA have developed large ammenity packages to provide thesethings that many of us used to enjoy 30 years ago. With a deed restriction the parks, theoretically, is assurred funding so long as a steady revenue stream (assessments) continue to be available. While it would be grand to think that local municipalties will continue to maintain items such as these, one simply look at the failing insfrastructure of roads, medians, schools, youth programs and municpal pools, cutting programs for youth etc. to know that the paradigm must change.

  2. Why do homeowners continuously allow themselves to be victimized by HOA! These HOA are money pits for a select few (attorneys, property managers, and contractors) and if people would just stop buying homes in communities with HOA they would become obsolete. Homeowners need to come together, sign a petition, go to and dissolve these HOA (only 1/2 of the subdivision is needed).

    I live next to a beautiful, manicured subdivision without a HOA. The parks and lakes are maintained by the park district.

    I pay taxes to the park district and the village. Tt should be maintaining my the common areas of my subdivision too. But, unfortunately like a lot of suckers we also got blind sided into a deal with the devil ( HOA) by the developers that built my home (silly, me). By the time I realized I had been sucker punched by the developers it was closing time. I wanted to back out of the deal. I was told if I did that I would loose 10% of my downpayment plus I had a contract on my other home so we were up a creek.

    Now as I look around and compare my subdivision to the one without a HOA the most obvious difference is there are no empty houses with weeds growing in the backyard and the people are friendlier.

    I can’t help but wonder if we have more foreclosures and weeds in the backyard in my subdivision because the HOA foreclosed on the property than the subdivision without a HOA?

    • Newer HOA documents provide NO PROVISION to dissolve as they are mandated by the local government. It’s worse than ever….


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