Background info on HOAs as ‘contractual communities’

I post this in response to Deborah Goonan’s post on her blog, HOAs, condos, & co-ops much more than ‘contractual communities.  I congratulate Deborah on her fine work on exposing HOA issues of substance.

First, the Berding article,  Why Community Associations Are Not “Governments, was written in January 2012.  At that time there was a detailed and lengthy exchange by several advocates on Privatopia Papers that preceded, and after, Berding’s post.

The issue are HOA governments or contracts was raised by Fred Pilot in a post on Evan McKenzie’s Privatopia Papers blog, HOA convenants not generally regarded as contracts in December 2011. Tyler Berding, and others, responded with several comments.

Evan McKenzie could not resist his replying to Pilot’s post and Berding’s comments, Do Americans consider CC&Rs Contracts, Revisited.  It seems that Berding then posted, on his blog, the above-mentioned article referenced by Deborah. The next day McKenzie posts on Privatopia a  reply comment by Berding , Do owners believe CC&Rs are contracts, part trois…  .  Two days later the replies by Fred Fischer and yours truly are posted:  Fred Fischer on the “Do owners believe CC&Rs are contracts?” debate  and

George Staropoli on the “Do owners believe CC&Rs are contracts?” debate, respectively.

There’s a lot of info contained in these early exchanges.  Read them to get a fuller understanding of the quasi-government issue.  Also, you can see my 2013 views in HOA Common Sense, HOA Governments in fact, No. 9.

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Published in: on February 2, 2018 at 3:31 pm  Comments (1)  

The dark side of American democracy made HOA-Land

In my 17 years involvement in HOA reform legislation, mainly in Arizona and some in other states, I noticed a bill voting pattern that disturbed me. The overwhelming preponderance of the successful decisions — Yea or Nay – for highly controversial HOA bills was a unanimous vote, with some reaching about 90%, and a bare few where the majority was 3 – 7 votes (AZ House has 60 members and the Senate 30 members).

Now for a little statistics. This was unexpected since the legislators are a statistical population and the overall behavior of the legislature, if without external influence as the statisticians would say, would reflect a normal statistical distribution as depicted by the common Bell Curve graph.[1] I have not observed this pattern over the years, leading to the conclusion that the votes of each legislator were not a ‘free’ and random decision.

In November 2008 I wrote at length about this disturbing behavior and concluded that,

For years I believed that the legislators would standup and defend the Constitution and protect the fundamental values, beliefs and principles of our Founding Fathers.  And when they repeatedly failed to do so, preferring to defend HOAs under the flimsy arguments of a constructive notice and “continuing to live” as a consent to be governed, I realized other factors were at work.  Over the past few years my thoughts turned to the influence of political parties and the control they have over the individual legislators, the powerful committee assignments that can kill bills without a hearing, and party positions. The majority party has control over chairmanships and submitting bills for final vote, among other powers.[2]

I quoted from The Second Civil War,

The political system has evolved to a point where the vast majority of elected officials in each party feel comfortable only in advancing ideas acceptable to their core supporters — their ‘base”.[3]

What is even more disturbing is that, in Arizona, the Democratic Party, for years the minority party, went along with the majority.  It is easily concluded that the external influence over controversial HOA reform legislation extended to both parties, and that the ‘rank and file’ obeyed the ‘bosses’.

The dark side of American democracy is at work in promoting, supporting and defending HOA-Land. And in every state of the union.

In my earlier post, HOA-Land: the product of the decline in democratic institutions in America, I found support for my views, and I wrote the following,

The authors of How Democracies Die provide the “glue” that ties the American decay and decline in democratic norms and institutions to the quiet emergence and acceptance of private government HOA-Land. 

In “Chapter 2, Gatekeeping in America,” the authors make the case that the political parties are the gatekeepers who control the legislature and who determine what is good for the state, regardless of the views of the people.

The real protection against would-be authoritarians has not been Americans’ firm commitment to democracy but, rather, the gatekeepers – our political parties.  Instead of electing local notables as the delegates to the Electoral College, as the Founders had envisioned, each state began to elect party loyalists.  

Until our political parties and elected officials stop speaking of “my job” and “I work 24/7,” which reflects a mental attitude of both employment and not public service, and a responsibility to their boss – the political party that employs them — and not to the public, nothing will change. Until the politicians return to the principles of democratic government as promulgated by The Founding Fathers, and the people demand such a return, HOA reforms of substance will remain elusive.

References

[1] For an explanation see Normal Distribution. Simply stated, when considering the size of the successful votes by the legislators for a number of controversial HOA bills should follow the Bell curve. In general, the size of he votes should run from 0 to 100% of the votes with the most frequently occurring size varying plus or minus from 50%.

[2] Ideological principles, not Constitutional principles, dominate HOA legislation.

[3] The Second Civil War: How Extreme Partisanship Has Paralyzed Washington and Polarized America, Ronald Brownstein, Penguin Books, 2007.

Published in: on January 30, 2018 at 10:04 am  Comments (1)  

HOA-Land: the product of the decline in democratic institutions in America

Over the years I’ve attempted to inform and educate advocates, legislators, the media, home buyers and the public in general about the “emergence and acceptance of a quiet innovation in housing[1] generally known as HOAs.[2] This “rise of residential private government[3] could not have occurred without

elected autocrats [and parties who] subvert democracy – packing and ‘weaponizing’ the courts and other neutral agencies, buying off the media and the private sector (or bullying them into silence), and rewriting the rules of politics to tilt the playing field against opponents.  Democracy’s assassins use the very institutions of democracy — gradually, subtly, and even legally – to kill it.[4]

The authors of How Democracies Die[5] provide the “glue” that ties the American decay and decline in democratic norms and institutions to the quiet emergence and acceptance of private government HOA-Land.[6]  The above quote can be easily applied to HOA-Land and its Evil Empire and die-hard followers, both affiliated organizations and individual leaders.

They explain that

Democracies may die at the hands . . .  of elected leaders . . . who subvert the very process that brought them to power. . .. More often, though, democracies erode slowly, in barely visible steps.

as openly confirmed in Community Associations.

How did HOA legal scheme with its rejection of constitutional government come about? The authors explain that: “there is no single moment — no coup, declaration of martial law, or suspension of the constitution – in which the regime obviously ‘crosses the line’ into dictatorship.” The mechanism used by the Evil Empire is described in the above quoted paragraph – by using “the institutions of democracy . . . to kill it.”

 

As for homeowner advocates and others seeking HOA reform legislation, How Democracies Die makes it clear that reforming the HOA legal scheme and state laws is a social and political movement.  Local and fragmented efforts have failed and will continue to fail until the advocates come to accept this reality.

CAI will spread its propaganda that they are the only experts in HOA law and extol the virtues of HOAs as “better landscaping makes better local communities.” Who will present a unified case for HOA reforms in Washington to counter CAI’s flood of conferences and seminars targeted to Congressmen and agency directors?  This is planned for May 8, 2018.  Who?  No one, that’s who!

References

[1] Community Associations: The emergence and acceptance of a quiet innovation in housing, Donald R. Stabile, Greenwood Press, 2000. A self-congratulatory book paid for by ULI and CAI.

[2] Establishing the New America of independent HOA principalities, George K. Staropoli, StarMan Publishing, LLC, 2008.

[3] See, Privatopia: Homeowners Associations and the rise of Residential Private Government, Even McKenzie, Yale University Press, 1994.

[4] How Democracies Die, Steven Levitsky & Daniel Ziblatt, Crown Publishing, 2018. Based on their research into democracies, internationally and historically, the authors make the case that the long-term decline in democratic norms and institutions has given rise to demagogic leadership. I make the case that HOA-Land is also a product of this dedline.

[5] Id.

[6] I introduced this term and defined it as, “a collection of fragmented independent principalities within America, known in general as “HOAs,” that are separate local private governments not subject to the constitution, and that collectively constitute a nation within the United States.”

 

Published in: on January 22, 2018 at 4:08 pm  Comments (3)  

AZ HB 2238 seeks clear enforcement of HOA decisions by ALJ

The strength in any law lies in its effective enforcement. The enforcement of OAH decisions by administrative law judges is set forth in the statutes as an appeal to superior court.  Somehow, CAI lawyers seem to have some difficulty in understanding the plain letter of the law.

The chain of authority in the statutes is quite clear.  With respect to ADRE, the agency responsible for dealing with HOA petitions to OAH, ARS 32-2199.02(B) States: The order issued by the administrative law judge is enforceable through contempt of court proceedings and is subject to judicial review as prescribed by section 41-1092.08.”

With respect to Administrative Hearings statutes, the relevant part of ARS 41-1092.08(H) states: A party may appeal a final administrative decision pursuant to title 12, chapter 7, article 6 . . ..”  This link takes us to ARS 12-910 as amended by HB 2238.

Currently, ARS 12-910 subsection E clearly states:

“After reviewing the administrative record and supplementing evidence presented at the evidentiary hearing, the court may affirm, reverse, modify or vacate and remand the agency action. The court shall affirm the agency action unless the court concludes that the agency’s action is contrary to law, is not supported by substantial evidence, is arbitrary and capricious or is an abuse of discretion.”

I cannot see how the intent and explicit wording of these statutes would lead a judge to hold,

“Petitioner (homeowner) is seeking to enforce an administrative decision. Pursuant to Ariz. Rev. Stat. Sec. 32-2199.02 the proper venue for a contempt of court hearing (seeking to enforce the administrative decision) is the Administrative Courts, not the Superior Court.” (Whitmer v. Hilton Casitas HOA, CV2016-055080, Maricopa County Superior Court.) The decision by judge is a copy of CAI attorney, Augustus Shaw’s outlandish argument![1]

In short, the Superior Court rejected enforcement as specified in ARS 32-2199.02(B).  In my Advisory of Dec. 3th, Are ALJ orders in AZ enforceable against HOA?, I called for legislation to put an end to the unconscionable abuse of HOA attorneys to weaken homeowner justice in OAH dispute adjudication. Representative Eddie Farnsworth responded with HB 2238, amending ARS 12-910.

ARS 12-910, was amended by striking “contrary to law” above and adding the following to subsection E,

THE COURT SHALL REVERSE, MODIFY OR VACATE AND REMAND THE AGENCY ACTION IF THE COURT DETERMINES THE AGENCY’S ACTION WAS CONTRARY TO LAW.  IN A PROCEEDING TO REVIEW ANY FINAL ADMINISTRATIVE DECISION OF AN AGENCY BROUGHT BY THE REGULATED PARTY AGAINST WHOM THE ADMINISTRATIVE DECISION WAS ENTERED, THE COURT SHALL DECIDE ALL QUESTIONS OF LAW, INCLUDING THE INTERPRETATION OF A CONSTITUTIONAL OR STATUTORY PROVISION OR A RULE ADOPTED BY AN AGENCY, WITHOUT REGARD TO ANY PREVIOUS DETERMINATION THAT MAY HAVE BEEN MADE ON THE QUESTION IN AN ADMINISTRATIVE DECISION. 

NOTWITHSTANDING ANY OTHER LAW, THIS SUBSECTION APPLIES IN ANY ACTION FOR JUDICIAL REVIEW OF ANY AGENCY ACTION THAT IS AUTHORIZED BY LAW.

 

Concerned homeowners must not drop the ball!  This bill must be actively supported throughout the legislative process by emailing the sponsor, Rep. Farnsworth, the chairs of all committees hearing the bill, and to the legislators who will make the final decision on the bill.   Submitting “Request to Speak” comments (not necessary to appear) before any committee hearing is mandatory. Your voice must be heard loud and clear, because you know the Evil Empire and its followers are there in full force.

If you are seeking justice, you must fight for this bill!

 

References

[1] Augustus Shaw was found to be abusive by the Superior Court judge in North Canyon v. Mobbs, CV 2005-015360, Maricopa County Superior Court, 2006. See judge’s May 9, 2006 Minute Entry that includes: “The Court has also reviewed Mr. Shaw’s March 21, 2006 correspondence to Ms. Mobbs in this regard, and finds it to be abusive and inconsistent with the fundamental principles of professionalism sought to be advanced by the Supreme Court and the State Bar. . . Compounding the Court’s concern is Mr. Shaw’s filing of a plainly frivolous motion.”

Published in: on January 15, 2018 at 11:41 am  Comments (1)  

AZ HB2119 seeks to limit State Bar authority by giving it to the Supreme Court

And so begins Arizona’s legislative session for 2018.   A surprising bill, HB2119 (Rep. Kern, sponsor), that seeks to place the power of attorney regulation directly in the hands of the AZ Supreme Court has made its way into the session.  Homeowner rights advocates and activists must jump on this bill and support it to reign in the abuse by rogue HOA attorneys.

Here is a summary that adds § 12-119.06:

A. TO THE EXTENT PROVIDED BY THE ARIZONA CONSTITUTION, ALL
REGULATORY FUNCTIONS RELATING TO THE PRACTICE OF LAW, INCLUDING THE
REGULATION OF ATTORNEYS IN THIS STATE, ARE WITHIN THE AUTHORITY OF THE SUPREME COURT.

B. . . .THE SUPREME COURT MAY USE MANDATORY ASSESSMENT MONIES ONLY FOR THE FOLLOWING REGULATORY FUNCTIONS FOR ATTORNEYS WHO ARE UNDER THE ACTIVE SUPERVISION OF THE SUPREME COURT:

1. ADMITTING AN ATTORNEY TO THE PRACTICE OF LAW.
2. MAINTAINING ATTORNEY RECORDS.
3. ENFORCING THE ETHICAL RULES THAT GOVERN ATTORNEYS.
4. REGULATING ANY CONTINUING LEGAL EDUCATION MANDATES FOR
ATTORNEYS.
5. MAINTAINING ATTORNEY TRUST ACCOUNT RECORDS.
6. PREVENTING THE UNAUTHORIZED PRACTICE OF LAW.
7. MAINTAINING THE CLIENT PROTECTION FUND, BOARD OF LEGAL
SPECIALIZATION AND THE APPOINTMENT OF CONSERVATORSHIPS TO PROTECT CLIENT INTERESTS.

C. THE STATE BAR OF ARIZONA MAY ESTABLISH, COLLECT AND USE
VOLUNTARY MEMBERSHIP DUES FROM AN ATTORNEY FOR ANY LAWFUL ACTIVITY THAT IS NOT INCLUDED IN SUBSECTION B OF THIS SECTION

The common violations by attorneys come under the AZ Rules of Civil Procedure R.11(b)

(b) Representations to the Court. By signing a pleading, motion, or other document, the attorney or party certifies that to the best of the person’s knowledge, information, and belief formed after reasonable inquiry:
(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;
(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

and the AZ Supreme Court Rules of Professional Conduct, R.42, V, D, E.R. 3.1.

A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a good faith basis in law and fact for doing so that is not frivolous, which may include a good faith and nonfrivolous argument for an extension, modification or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established.

Please note that R11(c) provides sanctions for a violation of R11(b)

c) Sanctions.
(1) Generally. If a pleading, motion, or other document is signed in violation of this rule, the court–on motion or on its own–may impose on the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the document, including a reasonable attorney’s fee.
Published in: on January 10, 2018 at 5:22 am  Comments (1)