Arizona’s landmark fair elections, free speech law on HOA governance

On Sept. 25, 2022, Arizona’s new HOA reform law (Session Law Ch, 125; HB2158),  bringing substantive free public speech on HOA governing issues and establishing a fair elections procedure, will become effective.

This is a major step forward to the application of Constitutional equal protection of the laws and proper due process as guaranteed to all US citizens. Under this bill, effective and meaningful opportunity for Arizona members to participate fairly and in an equal manner in the governance of an HOA.

It starts with the ability to campaign and discuss governing issues with the members on the same level playing field. All the members seeking change have to do is to get involved knowing they won’t be “fighting city hall” without legislative support. The “tools” are there for members to stand up and fight for their rights. No one else will do it for you! Especially your board of directors.

As James Madison wrote in The Federalist Papers #51: “If angels were to govern men, neither external nor internal controls on government would be necessary.” HOA boards for the most part have demonstrated that they are indeed not angels.

I congratulate the bill sponsor, Rep. John Kavanagh, and all advocates who supported this bill and the Arizona Legislators coming to understand the need to stop board of director’s abuse under authoritarian private agreements.

The intent and purpose of this law are highlighted below :

“‘association-specific political sign’ means a sign that supports or opposes a candidate for the board of directors or the recall of a board member or a condominium ballot measure that requires a vote of the association unit owners.“

The details specify the rights of members and prohibitions on the BOD regarding these signs. Furthermore,

“association may not prohibit or unreasonably restrict a unit owner’s ability to peacefully assemble and use common elements of the condominium [or HOA];

“group of unit owners may assemble to discuss matters related to the condominium [or HOA], including board of director elections or recalls, potential or actual ballot issues or revisions to the condominium documents, property maintenance or safety issues or any other condominium matters . . . .”

Relevant sections of HB 2158

The relevant sections of the new law can be read here: HB 2158;  Ariz. Sess. Law Ch 125 (2022). An audio version on Spotify can be heard here: https://spotifyanchor-web.app.link/e/mqz2Fe4Dytb

HB 2158; Ariz. Sess. Law Ch 125 (2022)

Reformatted for ease of comprehension. New law is shown in blue caps according to legislative rules. The law duplicates the provisions separately for Condo (ARS 33-1600 et seq.)  and Planned Community HOA (ARE 33-1800 et seq.)  statutes.

ARS 33-1261 (p. 3 – 4)

H. NOTWITHSTANDING ANY PROVISION IN THE CONDOMINIUM DOCUMENTS,

• AN ASSOCIATION MAY NOT PROHIBIT OR UNREASONABLY RESTRICT THE INDOOR OR OUTDOOR DISPLAY OF AN ASSOCIATION-SPECIFIC POLITICAL SIGN
• BY A UNIT OWNER BY PLACEMENT OF A SIGN ON THAT UNIT OWNER’S PROPERTY, INCLUDING ANY LIMITED COMMON ELEMENTS FOR THAT UNIT THAT ARE DOORS, WALLS OR PATIOS OR OTHER LIMITED COMMON ELEMENTS THAT TOUCH THE UNIT, OTHER THAN THE ROOF.
• AN ASSOCIATION MAY ADOPT REASONABLE RULES REGARDING THE PLACEMENT, LOCATION AND MANNER OF DISPLAY OF ASSOCIATION-SPECIFIC POLITICAL SIGNS,
• EXCEPT AN ASSOCIATION SHALL NOT DO ANY OF THE FOLLOWING:

1. PROHIBIT THE DISPLAY OF ASSOCIATION-SPECIFIC POLITICAL SIGNS BETWEEN THE DATE THAT THE ASSOCIATION PROVIDES WRITTEN OR ABSENTEE BALLOTS TO UNIT OWNERS AND THREE DAYS AFTER THE CONDOMINIUM ELECTION.

2. LIMIT THE NUMBER OF ASSOCIATION-SPECIFIC SIGNS, EXCEPT THAT THE ASSOCIATION MAY LIMIT THE AGGREGATE TOTAL DIMENSIONS OF ALL ASSOCIATION-SPECIFIC SIGNS ON A UNIT OWNER’S PROPERTY TO NOT MORE THAN NINE SQUARE FEET.

3. REQUIRE ASSOCIATION-SPECIFIC POLITICAL SIGNS TO BE COMMERCIALLY PRODUCED OR PROFESSIONALLY MANUFACTURED OR PROHIBIT USING BOTH SIDES OF THE SIGN.

4. REGULATE THE NUMBER OF CANDIDATES SUPPORTED OR OPPOSED OR THE NUMBER OF BOARD MEMBERS SUPPORTED OR OPPOSED IN A RECALL OR THE NUMBER OF BALLOT MEASURES SUPPORTED OR OPPOSED ON AN ASSOCIATION-SPECIFIC POLITICAL SIGN.

5. MAKE ANY OTHER REGULATIONS REGARDING THE CONTENT OF AN ASSOCIATION-SPECIFIC POLITICAL SIGN, EXCEPT THAT THE ASSOCIATION MAY PROHIBIT USING PROFANITY AND DISCRIMINATORY TEXT, IMAGES OR CONTENT BASED ON RACE, COLOR, RELIGION, SEX, FAMILIAL STATUS OR NATIONAL ORIGIN AS PRESCRIBED BY FEDERAL OR STATE FAIR HOUSING LAWS.

* * * *

J. NOTWITHSTANDING ANY PROVISION IN THE CONDOMINIUM DOCUMENTS,

AN ASSOCIATION MAY NOT PROHIBIT OR UNREASONABLY RESTRICT A UNIT OWNER’S ABILITY TO PEACEFULLY ASSEMBLE AND USE COMMON ELEMENTS OF THE CONDOMINIUM IF DONE IN COMPLIANCE WITH REASONABLE RESTRICTIONS FOR THE USE OF THAT PROPERTY ADOPTED BY THE BOARD OF DIRECTORS.

AN INDIVIDUAL UNIT OWNER OR GROUP OF UNIT OWNERS MAY ASSEMBLE TO DISCUSS MATTERS RELATED TO THE CONDOMINIUM,

* * *

 1. “ASSOCIATION-SPECIFIC POLITICAL SIGN” MEANS A SIGN THAT SUPPORTS OR OPPOSES A CANDIDATE FOR THE BOARD OF DIRECTORS OR THE RECALL OF A BOARD  MEMBER OR A CONDOMINIUM BALLOT MEASURE THAT REQUIRES A VOTE OF THE ASSOCIATION UNIT OWNERS.

ARS 33-1808 (p. 7 – 8)

K. NOTWITHSTANDING ANY PROVISION IN THE COMMUNITY DOCUMENTS,

• AN ASSOCIATION MAY NOT PROHIBIT OR UNREASONABLY RESTRICT THE INDOOR OR OUTDOOR DISPLAY OF AN ASSOCIATION-SPECIFIC POLITICAL SIGN BY A MEMBER BY PLACEMENT OF A SIGN ON THAT MEMBER’S PROPERTY.
•  AN ASSOCIATION MAY ADOPT REASONABLE RULES REGARDING THE PLACEMENT, LOCATION AND MANNER OF DISPLAY OF ASSOCIATION-SPECIFIC POLITICAL SIGNS,
• EXCEPT AN ASSOCIATION SHALL NOT DO ANY OF THE FOLLOWING:

• PROHIBIT THE DISPLAY OF ASSOCIATION-SPECIFIC POLITICAL SIGNS BETWEEN THE DATE THAT THE ASSOCIATION PROVIDES WRITTEN OR ABSENTEE BALLOTS TO MEMBERS AND THREE DAYS AFTER THE PLANNED COMMUNITY ELECTION.
  • LIMIT THE NUMBER OF ASSOCIATION-SPECIFIC SIGNS, EXCEPT THAT THE ASSOCIATION MAY LIMIT THE AGGREGATE TOTAL DIMENSIONS OF ALL ASSOCIATION-SPECIFIC SIGNS ON A MEMBER’S PROPERTY TO NOT MORE THAN NINE SQUARE FEET.
  • REQUIRE ASSOCIATION-SPECIFIC POLITICAL SIGNS TO BE COMMERCIALLY PRODUCED OR PROFESSIONALLY MANUFACTURED OR PROHIBIT USING BOTH SIDES OF THE SIGN.
  • REGULATE THE NUMBER OF CANDIDATES SUPPORTED OR OPPOSED OR THE NUMBER OF BOARD MEMBERS SUPPORTED OR OPPOSED IN A RECALL OR THE NUMBER OF BALLOT MEASURES SUPPORTED OR OPPOSED ON AN ASSOCIATION-SPECIFIC POLITICAL SIGN.
  • MAKE ANY OTHER REGULATIONS REGARDING THE CONTENT OF AN  ASSOCIATION-SPECIFIC POLITICAL SIGN EXCEPT THAT THE ASSOCIATION MAY PROHIBIT USING PROFANITY AND DISCRIMINATORY TEXT, IMAGES OR CONTENT BASED ON RACE, COLOR, RELIGION, SEX, FAMILIAL STATUS OR NATIONAL ORIGIN AS PRESCRIBED BY FEDERAL OR STATE FAIR HOUSING LAWS.

* * *

M. NOTWITHSTANDING ANY PROVISION IN THE COMMUNITY DOCUMENTS,

• AN  ASSOCIATION MAY NOT PROHIBIT OR UNREASONABLY RESTRICT A MEMBER’S ABILITY TO PEACEFULLY ASSEMBLE AND USE COMMON AREAS OF THE PLANNED COMMUNITY IF DONE IN COMPLIANCE WITH REASONABLE RESTRICTIONS FOR THE USE OF THAT PROPERTY ADOPTED BY THE BOARD OF DIRECTORS.
• AN INDIVIDUAL MEMBER OR GROUP OF MEMBERS MAY ASSEMBLE TO DISCUSS MATTERS RELATED TO THE PLANNED COMMUNITY,
  • INCLUDING BOARD ELECTIONS OR RECALLS, POTENTIAL OR ACTUAL BALLOT ISSUES OR REVISIONS TO THE COMMUNITY DOCUMENTS, PROPERTY MAINTENANCE OR SAFETY ISSUES OR ANY OTHER PLANNED COMMUNITY MATTERS.
  • A MEMBER MAY INVITE ONE POLITICAL CANDIDATE OR ONE NON-MEMBER GUEST TO SPEAK TO AN ASSEMBLY OF MEMBERS ABOUT MATTERS RELATED TO THE COMMUNITY.
  • THE ASSOCIATION SHALL NOT PROHIBIT A MEMBER FROM POSTING NOTICES REGARDING THOSE ASSEMBLIES OF MEMBERS ON BULLETIN BOARDS LOCATED ON THE COMMON AREAS OR WITHIN COMMON AREA FACILITIES.
  • AN ASSEMBLY OF MEMBERS PRESCRIBED BY THIS SUBSECTION DOES NOT CONSTITUTE AN OFFICIAL MEMBERS’ MEETING UNLESS THE MEETING IS NOTICED AND CONVENED AS PRESCRIBED IN THE COMMUNITY DOCUMENTS AND THIS CHAPTER.

O. For the purposes of this section: ,

1. “ASSOCIATION-SPECIFIC POLITICAL SIGN” MEANS A SIGN THAT SUPPORTS OR OPPOSES A CANDIDATE FOR THE BOARD OF DIRECTORS OR THE RECALL OF A BOARD MEMBER OR A PLANNED COMMUNITY BALLOT MEASURE THAT REQUIRES A VOTE OF THE ASSOCIATION MEMBERS.

The how and why of “boss” HOA presidents

This commentary is a follow up on my review of Kelly G. Richardsons’ article (Dictatorial HOA presidents and silent directors are at risk).

With all due respect to Richardson, his discussion of the role of HOA “boss” presidents and silent boards of directors makes no references to the causes of this common defect in the management of HOAs, or the more relevant, in ruling a community.  As an important CAI (Community Associations) lawyer advising and educating BODs on how to rule a community, we should expect not only answers but solutions as well.  His article does neither.

Richardson does  inform his readers about the makeup of good presidents: “Good HOA presidents understand the boundaries . . . . Good presidents are key . . . .”  He closes with the advice, “So, keep the good ones!”  He fails to address the legal structure of an adhesion contract and the CC&Rs that grant the BOD broad powers and authority. As such, the legal structure would not stand up to constitutional judicial scrutiny if the HOA were an arm of the state and not a private, contractual arrangement.

The legal structure prevents active, meaningful, democratic participation by members in board  elections and in amendments to the governing documents as found with public government. For example, members cannot file a petition, equivalent to a public domain initiative, requiring the BOD to hold a vote of the members on an issue, removing the absolute power to do as it pleases when contrary to the will of the  majority. The members would be able to contest the BOD’s position. Ihe absence of constitutional protections promotes the formation of power cliques that function as authoritarian governments. And so, we have “boss” presidents and silent boards of directors.

As a good lawyer, Richardson would probably say that this is the law, this is the way it is, and if you don’t like it change the laws. And who helped create and shape these pro-HOA laws?   For example, CAI has been involved since the beginning in 1964 in creating those Uniform Common Interest Ownership Acts (known as UCIOA) and adopted  with some modifications by a handful of states.

It’s up to YOU, as it has always been.

“It does not  help the sheep to blame the wolf. The sheep must not fall into the clutches of the wolf “ (Mahama Gandhi, fighting the imperialist British Empire).

Dictatorial HOA presidents and silent directors are at risk

This post is based on the article, HOA Homefront: Presidents are board members not bosses that acknowledges a serious and common problem with most HOA governance.  By Kelly G. Richardson | Kelly@Rodllp.Com. August 26, 2022.[1] 

* * * *

The HOA president’s role is often misunderstood and can result in a very serious board dysfunction. It can as well cause stress and risk for the president. First, it is critical to understand that the role and power of the HOA president are dramatically different than that of a for-profit corporate president.

In a for-profit corporation, the day-to-day running of the business is typically the responsibility of the president, the “boss” so to speak.”  However, in most HOAs the day-to-day execution of board decisions is executed by the association’s professional manager. “The HOA’s boss is not the president but is [] the HOA board.”

 The president has just one vote on the board, and that vote is no more valuable than any other director. Directors should take heed that those “who always automatically defer to the president are not fulfilling their responsibility to the association.”  Furthermore, corporation law holds any director  as implicitly agreeing if he does not post a dissenting opinion, which unfortunately, the governing documents are silent and do not provide an explicit right to file dissenting opinions.

By taking the “boss” role, a president is often outside his authority and disrespects the board that is the actual authority. Such a president could also be acting without corporate authority and exposed to personal liability for corporate commitments made without board approval.

Note 1. Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, a California law firm known for community association expertise.

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Homeowners do not have HOA ‘eminent domain’ protection

You all know about public domain eminent domain protection: the government cannot take your property for public use – public benefit — without fair market compensation, which you can negotiate and take to court if necessary. Acquiring your property is a “taking.” 

According to the courts,  it is not well known that the government’s denial of a natural use of your property is considered an informal taking, and compensation must be paid. I am surprised to learn that almost any personal property owned by the homeowner can be subject to a taking by the government. (Investopedia).

As an HOA member you do not have an equivalent HOA government taking protection whereby you are compensated for any takings or modifications demanded by the HOA. While HOA government takings per se are rare except for foreclosure rights, the HOA does demand that the homeowner replace or remove approved  landscaping trees or shrubbery, additions like sheds, playsets,  repaint the exterior, etc. At the homeowner’s expense!

I’ve found many times that corrective action is delayed until after completion of the approved homeowner improvements, and the HOA demands that it be torn down by the homeowner. Grossly unjust and unfair: it’s the incompetence of the HOA failing to act within a reasonable time while construction begins.

However, it’s understandable and acceptable if the governing documents specify, for example, that exteriors just be repainted every 15 years, or roofs inspected for necessary repairs every 20 years or so, etc.

The argument used by the HOA generally falls into keeping with the image  of the properties and maintain property values, for the benefit of the members, the HOA ‘public.’  As it stands, the owner/ member has no right to demand compensation and is another instance of constitutional protections lost in HOA-Land.