CC&Rs are a devise for de facto HOA governments to escape constitutional government

This commentary takes a long look at the validity of HOA covenants and the need for judicial enforcement in order to invoke state action with respect to fundamental rights and freedoms.   It informs the reader that such enforcement depends upon the member’s voluntary agreement to be bound by the declaration, and raises issues of the lack of genuine agreement.  The agreement requirement is not analyzed under contract law, but under HOA law that has been designed to protect the HOA and position the declaration as the supreme law of the HOA community.

Long ago in 1994 Professor McKenzie wrote, “HOAs currently engage in many activities that would be prohibited if they were viewed by the courts as the equivalent of local governments.[i]

Two years after Marsh v. Alabama[ii] — the 1946 Supreme Court opinion setting the misguided “public functions” test for a municipality — the Court specifically dealt with the question of the constitutionality of restrictive covenants.  The issue in Shelly v. Kraemer[iii] was “that judicial enforcement of the restrictive agreements in these cases has violated rights guaranteed to petitioners by the Fourteenth Amendment.”

With respect to restrictive covenant enforcement the Shelly court said:  “That the action of state courts and of judicial officers in their official capacities is to be regarded as action of the State [‘state action’] within the meaning of the Fourteenth Amendment, is a proposition which has long been established by decisions of this Court. . . . The federal guaranty of due process extends to state action through its judicial as well as through its legislative, executive, or administrative branch of government.”   The Court held “that in granting judicial enforcement of the restrictive agreements in these cases, the States have denied petitioners the equal protection of the laws and that, therefore, the action of the state courts cannot stand” (my emphasis).

Unfortunately, the Court chose a narrow view of this issue limiting it to that involving racial discrimination.  A more expansive application of the 14th Amendment can easily be applied to any covenant that violates a member’s rights, freedoms or privileges and immunities as a citizen, but that has not been the case.

The 1976 Florida case, Brock v. Watergate Mobile Home,[iv] directly addressed the question of an HOA declaration and its actions under the Declaration.  It used the Marsh “public functions” test and the additional “close nexus” test (HOA action is closely resembles government action). No state action was found.  The HOA was not like a company town and the state’s involvement, as occurred in the limited context of the case, was not a close nexus.

Please understand that CC&RS and covenants are not automatically invalid or unconstitutional.  It requires a court to declare them so, at the expense of a homeowner lawsuit.  

Also, it is important to note that the court question was not about the validity of a restrictive covenant itself, but the court enforcement of that covenant. (This requires a lawsuit in which the court upholds the covenant and a subsequent lawsuit charging a violation of the 14th Amendment.)  The Shelly court’s view was that as the 14th Amendment applied “only to governmental action, as contrasted to action of private individuals, there was no showing that the covenants, which were simply agreements between private property owners, were invalid.”   Furthermore, “[The 14th] Amendment erects no shield against merely private conduct, however discriminatory or wrongful” (my emphasis).  In Arizona, today, the appellate court is to decide whether a CAI attorney amendment to Terravita’s CC&Rs that directly contradicts state law will be held valid.[v]  Behold the power of private contracts!

In view of the above we can ask, what makes a valid agreement?  Fortunately, a condition was attached to this view, which is never ever mentioned by pro-HOA supporters including those renowned CAI attorneys: “So long as the purposes of those agreements are effectuated by voluntary adherence to their terms. Sadly the courts have unquestionably accepted the validity of the CC&Rs as a voluntary agreement and this consent to be bound has become legal doctrine. For example, in Midlake v. Cappuccio the PA appellate court upheld a valid consent to agree by the buyer at time of purchase: “The Cappuccios contractually agreed to abide by the provisions in the Declaration at the time of purchase, thereby relinquishing their freedom of speech concerns regarding placing signs on this property.”[vi]   There have been numerous other cases where the court has upheld a valid consent to agree per se and a waiver/surrender of constitutional rights under said holding.

But, is there a genuine consent to agree?  I have written several commentaries about the lack of a genuine consent to agree as a result of misrepresentation, fraud, half-truths and hidden factors not fully disclosed to homebuyers.[vii]  Certainly not according to contract law 101 with its requirements for full disclosure, a meeting of the minds, and absence of fraud.

Unfortunately, once again, HOA declarations and covenants are seen as a law unto themselves that is based on a cutting and pasting of various laws, including constitutionality law, to provide for the protection and survival of HOAs.  We have pro-HOA statutes in every state and a Restatement of Servitudes[viii] (covenants) that was written to promote and protect HOAs. “Therefore this Restatement is enabling toward private government, so long as there is full disclosure[ix] (my emphasis).

The Restatement advises judges — and is regarded as precedent — that its collection of laws known as HOA law dominates all others.   Section 6.13, comment a, states: “The question whether a servitude unreasonably burdens a fundamental constitutional right is determined as a matter of property law, and not constitutional law”. Section 3.1, comment h, states: “in the event of a conflict between servitudes law and the law applicable to the association form, servitudes law should control.”

And we have CAI, the national HOA lobbying organization, repeatedly making it clear that the HOA is a city-state, an independent principality, and the decisions of the HOA are the supreme law of the community.[x]  It is easily concluded why CAI has vehemently denied and opposed any reference or declaration that HOAs are de facto governments — mini or quasi-governments — and argue that HOAs remain free from constitutional restrictions on government entities.

HOAs have been institutionalized under this state of affairs, this public policy, and unquestionably accepted as this is the way it is.  Nothing will improve the conditions to which HOA residents are subject unless HOA public policy changes. Public policy today rejects constitutional government for HOAs and allows HOAs to operate outside the law of the land.

The policy makers fail to understand that the terms and conditions of the HOA CC&Rs cross over the line between purely property restrictions to establishing unregulated and authoritarian private governments.



[i] Evan McKenzie, Privatopia: Homeowners Associations and the Rise of Residential Private Governments, Yale Univ. Press, 1994.

[ii] Marsh v. Alabama, 326 U.S. 501 (1946). The holding was that a company town was no different from a municipal town.

[iii] Shelly v. Kraemer, 334 U.S. 1 (1948).

[iv] Brock v. Watergate Mobile Home, 502 So. 2d 1380 (Fla. 4th Dist. App. 1987). This case was a civil rights violations case based on 42 US 1983 as a result of various acts by the HOA.

[v] Brown v. Terravita, 1 CA-CV 14-455. See Will Arizona allow HOA covenants to dominate state laws? and  Does the Constitution support the will of the HOA no matter what?

[vi] Midlake  v. Cappuccio, 673 A.2d 340 (Pa.Super. 1996) (PA appellate court). .

[vii] See “Consent to be governed, No. 4,HOA Common Sense: rejecting private governmentProposed “consent to be governed” statute, the “Truth in HOAs” bill; and court examines consent and surrender of rights in HOA CC&Rs.

[viii] Restatement Third, Property: Servitudes (American Law Institute 2000).

[ix] Id., From the Forward: “Professor Susan French [Reporter (chief editor/contributor) for this Restatement] begins with the assumption . . . that we are willing to pay for private government because we believe it is more efficient than [public] government  . . . . Therefore this Restatement is enabling toward private government, so long as there is full disclosure . . . .”

[x] 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 and goals.

20 thoughts on “CC&Rs are a devise for de facto HOA governments to escape constitutional government”

    1. Where is the article that you wrote that discusses contract law is breached when the “contract” is not provided or even read.

  1. I agree fully with the last comment made. In addition, the CAI, Management Co’s and HOA boards are driven by egos. They don’t like you, they won’t work with you! Therefore you are not in control and it’s absolutely impossible to get control. No matter how many HOAs forums say “if you don’t like the management then change it” … It won’t happen because virtually ever HO is apathetic. However, if you reside in a SFR outside an HOA you have control, subject to county rule and deed restrictions.. Hire a landscaper you don’t like … fire him. You get to choose your own roofing contractor and whether you are willing to pay a low, average or high price for a roof. HOA’s are for losers (and yes I live in one). They are for people who are totally willing to give up control. They are the same people who would give up their 1st and 2nd amendment rights. HOA’s are tyrannical micro gov’ts.

    1. NO! HOA are not for people who gave up their rights! Do not justify the harassment! HOA have took over the people rights!

  2. Maria … HO’s will indeed be triumphant but it will take persistence and it will cost us money. Communities are full of apathetic people … they don’t care what the board does until it affects them. When it does affect them, they dutifully become submissive. Boards count on that. Stand up to each and every one of them. It’s important your voice be heard and if you have the time, make a presentation to the State Legislature. If you are right, don’t back down. We need noise makers.

    1. There’s another layer to this onion: homeowner disenfranchisement due to undemocratic election and voting procedures. As long as voting interests are assigned per “unit” owned and not “one person, one vote,” the only voices that will be heard are those of majority unit owners — i.e. developers and investors that own multiple properties, have weighted votes, and hold most of the proxies.

      The push for fundamental transformation must come from the top down — from Constitutional challenges to Deed Restrictions to establishment of Land Use policies that limit or prohibit future development with mandatory Homeowners’ Associations.

      With increased media coverage and consumer education, there ought to be significant market pressure on the industry as more and more folks abandon and reject Association (private) governance, and developer-created-and-controlled “communities,”

    2. I don’t know why I can’t find my original post…
      Anyway, I do make noise! Lots of noise in my Association of 200 people! But, like you said, the people are dumb…they take it all!
      Here is pure example:
      My association spent 700k on needles walls. I called it Money Laundry and tried to block the Board for the future expenses by sending a letter to all of the 200 homeowners about the situation. In addition I provided them with a form, in which the homeowners needed only to put their name and unit number and to check the boxes they agreed with. The form was requesting special meeting to vote and add the below things in our Bylaws. Among the boxes were, 1 The Board cannot spend more then 100k without approval of the majority. 2. The Board must obtain at least 3 different bids from different Companies for every new project, 3. The bids must be kept for a period of 3 years. 4. Board members must put in writing why they voted for one over another bid. 5. Minutes from the Board must be published within 48 hours… If I got at least 51 forms back, we would have a voting and we could put those in our Bylaws and regulate the Board!
      However, guess how many did I get back…Only 6!
      Then, I contacted those 6 and tried to unite them and we get together so we keep the fight…NONE OF THEM RESPONDED!
      I do not understand these people!
      I served them with all! They just needed to put their name, unit number and check the boxes they wanted…

  3. Do not presume–it would have been nice to first spell out “CC&Rs” afterward use the abbreviation. mdk4130!

    1. CC&Rs is a pretty common term for HO’s, but I see your point. It’s initials like CAI that I think are even more important to spell out. This is a group that works against HOs. Many people reading this might not see them as the evil force they are. mdk4130 if you want to see change in HOA’s write letters to the legislators. Most of them ignore the letters bc we’ve willingly signed a contract. Change needs to happen or more people need to restore homes outside HOA’s. If/when I move I will NEVER participate in anything close to an HOA. I’ve over-improved my home, so unfortunately I need to wait until the market moves upward. I’m not willing to take a major loss.

  4. The most bizarres personalities I’ve ever encountered, as those people who are elected to run an HOA. It is a government gone amuck. You’re right … if we were protected by the American constitution, things would be significantly improved. CAI is worthless to a HO.

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