To be or not to be a mini or quasi government? Hyatt said ‘yes’

The controversy over whether or not HOAs are mini-governments or quasi-governments needs to be fully understood.  While I have written extensively on this topic,[1] allow me to take another peek into the controversy.

As an eye opener to many, I have extensively quoted Wayne Hyatt’s[2] 1976 statement on HOAs as mini-governments, as cited in the 1983 California case, Cohen v. Kite Hill.[3]  (My emphasis).

 

In a thoughtful article[4] . . . Hyatt and Rhoads note the increasingly “quasi-governmental” nature of the responsibilities of such associations: “The other essential role directly relates to the association’s regulatory powers; and upon analysis of the association’s functions, one clearly sees the association as a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government. As a ‘mini-government,‘ the association provides to its members, in almost every case, utility services, road maintenance, street and common area lighting, and refuse removal. In many cases, it also provides security services and various forms of communication within the community. There is, moreover, a clear analogy to the municipal police and public safety functions. All of these functions are financed through assessments or taxes levied upon the members of the community, with powers vested in the board of directors, council of co-owners, board of managers, or other similar body clearly analogous to the governing body of a municipality. Terminology varies from region to region; however, the duties and responsibilities remain the same.”

“Because each owner automatically becomes a member of the association upon taking title … the association has the power, and in many cases the obligation, to exert tremendous influence on the bundle of rights normally enjoyed as a concomitant part of fee simple ownership of property.”

“With power, of course, comes the potential for abuse. Therefore, the Association must be held to a high standard of responsibility: “The business and governmental aspects of the association and the association’s relationship to its members clearly give rise to a special sense of responsibility upon the officers and directors…. This special responsibility is manifested in the requirements of fiduciary duties and the requirements of due process, equal protection, and fair dealing.” [Sound familiar?]

Yet, this recognized international figure’s statements were ignored and not cited in a number of subsequent decisions. Instead, the courts preferred the antiquated, non-HOA decisions of the 1946 and 1948 “company town,” public functions test decisions in Marsh v. Alabama and Shelly v. Kraemer. These decisions predated the current HOA concept and legalities created in 1964 and were relied on.[5]  Like the “walking dead,” Marsh should be shot in the head and put away for good!

Now, to fully understand the issue we need to play the lawyer game and examine and parse the meanings of words and phrases.  Sorry, we must because that’s what HOA attorneys do — they can’t help it.

What is a mini-government? A quasi-government?  Following the recognized common meaning of words doctrine, “mini” means small and “quasi” means like.”  So, are we talking about small public governments? If so, I think this term answers the question that HOAs are small public governments.

Or are we talking about governments like public governments?  “Like” implies not really, but has the feel, or aura, or legalities of a public government.  If so, to what extent does a government become a public government?  How much “likeliness” is needed?  To what extent should homeowners have “like” constitutional protections?  All of them or some?  Or just some that give the appearance of constitutional rights and freedoms?

It seems that HOAs already have a number of “like” protections, but totally deficient and failing to protect the people.  They treat the HOA members as if they are “like” US citizens, having surrendered their citizenship.  This cannot be tolerated in a nation that prides itself as the ideal democratic country in the world.  Not at all!

It’s time to stop playing the HOA lawyer “word games” and accept the reality that HOAs are outlaw governments and must be held accountable under the Constitutional, as is required of all other governing bodies including those under Home Rule statutes.

References

[1] See in general: Do state HOA Statutes Establish HOAs as State Actors? (2007); The Constitutionality of state protected homeowners associations (2009) (Discussion on Hyatt’s view); HOA Case History: state actors or mini/quasi government (2011).

[2] Wayne Hyatt was a prominent figure in the promotion of HOA-Land as well as an important person in creating CAI in 1973, serving as its second president.

[3] Cohen v. Kite Hill, p. 5-6, 142 Cal App 3d 642 (1983), citing Raven’s Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114 Cal.App.3d 783, 799 [171 Cal.Rptr. 334]). Cohen has been cited in Terre Du Lac Ass’n, Inc. v. Terre Du Lac, Inc., 737 S.W.2d 206 (Mo. App. 1987); Damon v. Ocean Hills Journalism Club, 85 Cal. App. 4th 468 (2000).

[4] “Concepts of Liability in the Development and Administration of Condominium and Home Owners Associations” 12 Wake Forest Law Review at page 915, (1976).

[5] Brock v. Watergate, 502 So.2d 1380 (Fla. 4 Dist. App. (1987) (close nexus dicta); Midlake v. Cappuccio, 673 A 2d 340 (PA. Super. 1996); S.O.C. v. Mirage Casino-Hotel, 43 P 3rd 243 (Nev. 2001); Westphal v. Lake Lotawana, 95 S.W.3d 144 (Mo. App. 2003) (“Mr. Westphal fails to cite any authority to support his argument that the action of a quasi-governmental entity is state action.”)

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  1. […] See in general, To be or not to be a mini or quasi government? Hyatt said ‘yes’; Do state HOA Statutes Establish HOAs as […]


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