Misrepresentation: CAI comes with unclean hands

I argue that  CAI exhibits a pattern of misleading advertising, at the national and state levels, intended to induce the public to buy HOA controlled homes and to attain favorable support from the media, the legal-academic community, and state legislators.  In other words, it appears that there is misrepresentation in its advertising.  Here are some examples at the national level and a few CAI state chapters. (Note that I include dates with my quotes as web pages change from time to time.)

CAI Central

“CAI provides information and education to community associations and the professionals who support them. Our mission is to inspire professionalism, effective leadership and responsible citizenship.”  (Building Better Communities, http://www.caionline.org/Pages/Default.aspx, Aug. 28, 2014).

“An international organization dedicated to building better communities, CAI provides information, education and resources to all community association stakeholders, including community managers and homeowner leaders.”  (Who Are We,

http://www.caionline.org/about/who/Pages/default.aspx, Aug. 28, 2014).

“Providing respected professional education remains one of CAI’s core missions—and thousands of managers continue to take full advantage of these opportunities.” (Core Mission, http://www.caionline.org/about/who/Documents/Annual_Report.pdf, Aug. 28, 2014).

Nowhere does CAI mention that it is a business trade organization, a 501(c)6 tax-exempt nonprofit, whose purpose is to benefit its members.[1]  Rather, the impression given above is that it is an educational organization to help HOAs and their board members.  However, HOAs are not CAI members and only 60% of CAI’s members are HOA members called individual “volunteers. However, the dominant factions are the attorneys and management firms who are the vendors to HOAs. Only 2 seats on the 14 member CAI Board of Trustees are for these “volunteers.” (Note that the above term “stakeholders” as commonly used with HOA means the vendors and does not include HOAs).

As a business trade organization, isn’t it a conflict, a violation of its trade group status, to speak for, provide education, and guide the consumers of its members’ services, the HOA?  Shouldn’t that be the job of a bona fide HOA association? A true association of HOAs, consistent with other industry or professional associations, would consist of HOA members who are allowed to vote.  It would allow the vendors or stakeholders – CAI, other management firms or associations and attorneys – to be non-voting associate members.

As I see an attempt to get around not having HOAs as members, CAI’s volunteer application offers discounts for multiple board members who join.  Page 2 is titled, “Membership Application for [association name]” if more than 1 director is signing up. (http://www.caionline.org/about/benefits/Documents/cavl_application.pdf). A 2005 complaint was filed with the IRS  charging CAI with violating its trade group status by having consumers, HOAs, as members.  The result was that CAI dropped HOAs as members and apparently got around this restriction by introducing “volunteer” members. As the application shows, CAI offers inducements in order to influence an entire HOA’s board, a consumer of its members’ services.

“While joining CAI on your own is important, having your entire board connected to CAI is the best way to ensure you are making informed decisions—and an excellent way to help your board members achieve the results, respect and recognition they deserve.”  (Benefit for

Homeowner Volunteer Leaders,

http://www.caionline.org/about/benefits/Pages/VolunteerLeader.aspx, Aug. 28, 2014).

Furthermore, it is unconscionable that CAI advertises and speaks before the policy makers and legislative bodies claiming to speak for HOAs and their members.

“LACs prevented the enactment of flawed legislation while working to ensure that other bills reflected the interests of homeowners, associations and the industry professionals who serve them.” (CAI 2013 Annual Report, State and Federal Engagement,

http://www.caionline.org/about/who/Documents/Annual_Report.pdf,  Aug. 28, 2014).

Let’s examine this preposterous claim even if CAI indeed had HOAs as members.  By its own data, CAI states that 60% of its membership is volunteers[2], and if each were in a separate HOA CAI would have representation of, at most, some 19,200 HOAs.  That would make CAI representation equal to a paltry 6% of all HOAs.[3]   What a blatant misstatement of representation!

 

Selected state chapter advertising – no mention of business trade group or 501(C) 6 tax-exempt

Arizona Central

“The Community Associations Institute national chapter was founded in 1973 as a multi-disciplinary non-profit alliance serving all stakeholders [does not include homeowners] in community associations. It provides education and resources to America’s 315,000 residential condominium, cooperative, and homeowner associations, and to the professionals and suppliers who serve them.” (http://a.mwapp.net/p/mweb_ws.show2?

xpod_id=77805054&xcanvas=&xid=79759889, Aug. 28, 2014).

New Jersey –

“The New Jersey chapter of CAI (CAI-NJ) is dedicated to enhancing the quality of  community association living, through education, legislative advocacy and  professional development. . . . The Community Associations Institute (CAI) is a national, non-profit organization dedicated to providing the education and resources necessary to foster vibrant, responsive, competent, community associations and helping them promote harmony and responsible leadership.” (http://www.cainj.org/about/about-cai-nj/, Aug. 28, 2014).

Florida central chapter –

An education and resource institute dedicated to the 7,500+ HOA & Condominium Associations in Central Florida, their volunteer leaders, and the business partners who support them. (http://www.caicf.org/, Aug. 28, 2014). For more than 30 years, CAI has been the leader in providing education and resources to the volunteer homeowners who govern community associations and the professionals who support them. (http://www.caicf.org/site_page.cfm?pk_association_webpage_menu=446&pk_association_webpage=470, Aug. 28, 2014).

Orange County, CA chapter –

“The Orange County Regional Chapter of Community Associations Institute (CAI-OCRC) provides education, networking, resources and advocacy for community associations and the professional and volunteers who serve them. . . . Members include condominium associations, cooperatives, and homeowner associations . . . .” (http://www.caioc.org/, Aug. 28, 2014).

Conclusion

When CAI goes before the policy makers, government officials or legislative committees, acting as modern day Philosopher Kings,[4] but raising questions of candor to the tribunal, advocates must speak out loudly.  Any such statements must be confronted, challenged and exposed before the audience addressed by CAI.  Speaking to one another is an empty exercise, unless to exhort others to act.  And after repeated confrontation as above and the recipient fails to act, then challenge the policy maker, the government official or the legislative committee – Why are you doing nothing?  Tell them that you have provided documentation that any reasonable person would agree reflects the unethical and illegal conduct of the lobbyists.  Why are they not acting in a responsible manner?

“In every stage of these oppressions we have petitioned for redress in the most humble terms; our repeated petitions have been answered only by repeated injury.”  (Decl. of Indep.)

References

[1] “IRC 501(c)(6) provides for exemption of business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues (whether or not administering a pension fund for football players), which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.” (http://www.irs.gov/pub/irs-tege/eotopick03.pdf). (Contrast CAI with “real estate boards,” more commonly known as the association of realtors, realtor education is focused in its professional members and not on the homebuyer who is a consumer of the services of its members.  Realtors do not lobby for home sellers/buyers, but for its agent members.)

[2] From CAI miniscule minority dominates public policy (2007).

[3] CAI’s Industry Data (http://www.caionline.org/info/research/Pages/default.aspx)

shows 326,000 HOAs and states that it has some 32,000 members (http://www.caionline.org/about/who/Pages/CAI40thAnniversary.aspx). That’s a 32/326.6 ratio of 9.8%.  My best estimate from note 2 above is that volunteers make up just 60% of the members, making HOA representation at about 6% at most.  “At most” means that there is just one volunteer from an HOA, which we know is not true.

[4]Until philosophers rule as kings, that is, until political power and philosophy entirely coincide…cities will have no rest from evils…there can be no happiness, either public or private, in any other city.” Republic, Plato.  (In other words, “the key to the notion of the ‘philosopher king’ is that the philosopher is the only person who can be trusted to rule well.”

Advertisements
Published in: on August 28, 2014 at 11:01 am  Comments (21)  
Tags: ,

The URI to TrackBack this entry is: https://pvtgov.wordpress.com/2014/08/28/misrepresentation-cai-comes-with-unclean-hands/trackback/

RSS feed for comments on this post.

21 CommentsLeave a comment

  1. […] [2] Misrepresentation: CAI comes with unclean hands.  Contains multiple quotes by CAI HQ and state chapters evidencing this misrepresentation. […]

  2. […] See CAI: the HOA form of government is independent of the US Constitution;  Misrepresentation: CAI comes with unclean hands and Will the real CAI standup: its contradictory beliefs, pronouncements […]

  3. […] Misrepresentation: CAI comes with unclean hands […]

  4. […] See Misrepresentation: CAI comes with unclean hands and Will the real CAI standup: its contradictory beliefs, pronouncements […]

  5. […] Misrepresentation: CAI comes with unclean hands. […]

  6. […] respect to my Commentary, Misrepresentation: CAI comes with unclean hands, this paper contains quotes by CAI leaders, state chapter leaders and CAI attorneys – in 20% […]

  7. For those willing to provide a list of CAI inconsistencies between its advertisements or public policies and the conduct of its members, Ward Lucas at wardlucas@msn.com agreed to serve as a collection point. This will enable us to present a widespread national picture about CAI. Email him your findings ASAP!

    PLEASE PARTICIPATE! Providing this info on a national basis has immense clout. CAI is open to questions about its conduct. An effective national expose will help you WILL HELP YOU IN DELING WITH YOUR STATE LEGISLATORS who may believe that CAI sits on the right hand of God.

  8. The NJ state chapter of CAI has such a powerful lobby that legislation to reasonably regulate HOA boards and protect shareholders at the state level rarely gets out of committee.I investigated and discovered that both the management company and the engineering firm that conducted a facade study are CAI members. My understanding is that CAI was originally established as a shareholder advocacy organization but “morphed” into a business group, creating strong lobbies throughout the US. It is a complete mystery to me why federal legislators have totally ignored the abuse of power by the CAI, HOA boards, HOA lawyers, management companies and related “stakeholders” – which seems never to include shareholders.

  9. What is the scope of CIA in Virginia?

  10. This week I had my first experience with CAI in Northern and Southern Az. I am in the process of deciding whether to sue my HOA. I’ve asked to see copies of docs from the last 5 yrs. They have not been forthcoming BUT I am told I will get them soon. So I’ll wait a bit and if I don’t get them I’ll sue. Now I’m an ordinary naive HO, divorced and single, exactly who the BODs like to pick on, and this week I wrote to the CAI, Kayte Comes in No AZ, with my HOA issues all lined out. She called me and said she had forwarded my e to Mike Shupe who represented So Az. Did I have a say in the action she took? NO! Then I learned …. Hold the applause … That MIKE SHUPE works for Carolyn Goldschmidt, the attorney representing my HOA. She sent a nasty e to my attorney who forwarded it to me. Now should the owner of this website like to post these e’s so that others will know to STAY AWAY from CAI, I’m happy to provide them. Just write back. Mike Shupe NEVER called me, he just took it upon himself to hand it all over to their attorney. DO NOT TRUST THESE PEOPLE. IVE LEARNED THE HARD WAY.

  11. Has any HOA ever voted itself out? Has there ever been enough interest in any neighborhood HOA to get the necessary 2/3 vote? (I live in an HOA in Louisiana.) Who has ever held the CAI accountable?
    Please keep up the good work.

    • Julie, I know of associations who have dissolved themselves via a membership vote. I have read and seen where dissolution depends on what is explained in your CC&R’s, or by laws and at the very least Louisiana state law. It appears form what I have read, so much depends on what your HOA is comprised of. This is not advice and I am not an attorney, but as an example, from what I have read, does your HOA own the roads? In different areas of the country many more HOA’s own the roads than in other areas. If the HOA owns the roads they will have to petition the state to take them over and this process varies from state to state. Also, what are your common elements? Is there a lot of land that will be given to a town, or county? How about retention ponds? Maybe, you can google some of the specific issues you have and see what other’s have to say.
      It sounds like, though, you and the other homeowners would probably best be served by talking to an attorney who knows real estate law in your state. I know that is probably not the answer you want to hear, but it would probably be in all of your best interests and especially over the long term. Maybe you can talk with some other advocates in your state and ask them. What does your Attorney General’s office have to say? This is a great forum and George Staropoli is one of the very, very best and we are all fortunate he has taken the time to write on this incredibly important issue.

      • Our HOA (POA) in Utah tried to vote itself out and the county said NO. they do not want to take it over and even thought they own the roads (in public domain by plat) it also says we have to maintain the roads so the county will not let us dissolve. We would be able to dissolve immediately if the county would let us…it is horrible and the board members constantly abuse their power–they’re retired guys with too much time on their hands. Its a nightmare here.

  12. And unfortunately so many are brainwashed and easy to manipulate. They don’t see the total picture and how they support this monopoly. When in power they just see a strong power to turn to that helps them to call the shots and strong arm. We need George Staropoli and his brillant mind in Congress.

  13. Thank you, George for taking the time to address this important issue. The CAI, in my opinion, is nothing more than a fraudulent group that had attained power with the legislators and the property managers. In the process the home owners have been severely damaged.

    How does such a despicable bunch operating under the guise of something good gain such power?

    Very few home owners in HOAs have even heard of the CAI. It’s the best kept secret in the HOA industry from the home owners. It’s also the most detrimental and needs to be exposed, as I see it.

    Wouldn’t it be in the best interest of all home owners and HOAs for the CAI to be outlawed completely? And for all property managers to be required to have a formal non-CAI related education? And then be bonded, licensed, and overseen by a reputable agency? Would that reduce the abuse and bring some honesty into the HOA world? It seems to me it just might be a good place to start.

    I believe it is more than false advertising. I think it’s downright fraud they are committing and duping millions of people in the process…legislators included!

    • If anyone would like to file an IRS complaint against CAI, all you need to do is to complete IRS Form 13909 (go to http://www.irs.gov/pub/irs-pdf/f13909.pdf) and provide evidence of your complaint.

      Those who are ready to file please contact me and I will provide the 2005 IRS reply and complaint as relevant prior CAI history.

      • Is the thought here that filing with the IRS would expose them as being a profitable organization while operating as a non-profit?

      • No. They have lots of $$$$ but so long as nobody owns stock and gets a dividend its a nonprofit.

        The point is that CAI must be held accountable for its misleading statements, which will be very hard for it to justify. Should a legislator take the word of an entity that speaks with a forked tongue?

        Of course, in their defense of accepting CAI as the “messiah,” legislators would say that CAI has helped HOAs to provide for harmony, contentment, and a better landscape, which overrides any failure to correct problems. They probably would say that without CAI the HOAs would be a real mess. Thank God for CAI.

        We need to set the record straight! We need to “dare disturb the sounds of silence.” (Sounds of Silence, Simon & Garfunkel, 1964).

        CAI was formed 21 years ago to help solve the many problems with HOAs after 19 years. Who in their right mind would hire someone with that track record?

      • I agree the “sounds of silence” need plenty of disturbance.

        I’m just confused on what role the IRS would play in doing that. Perhaps the IRS performs more functions than I am aware?

      • Like in 2005, the IRS can strip CAI from its tax-exempt status or CAI removes HOAs as members. Now, CAI can be stripped of its tax-exempt status or agree not to tell everybody that it speaks for HOAs and homeowners. It must say, like the realtor association, that it speaks for its HOA vendor members and not the HOA or its members when it seeks new legislation or to attract members.

        Presently, it still has this conflict of interest as to who and what it’s fighting for. Their members or the HOA? The IRS can stop the misrepresentation and at least have CAI say it’s a business group and not an educational group.

      • I would like to take this step. I just need to know what it is the IRS needs to see–I was a member here as an individual and that is how I found out hat they are–UTAH write me at business at pocketsponser dot com.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s