AZ legislative ‘establishment’ blocking substantive HOA bill

 

In my commentary, Landmark HOA legislation restores homeowner property rights, I indicated that Arizona’s HB 2382 was on the verge of being sent to the Governor.  The bill would restore “ex post facto” HOA amendment rights for homeowners that would, indeed, make the CC&Rs “contract” a more binding contract.  It would not allow amendments that harmed owners affected by the amendment unless they consented to the bill. It is a limited bill, but contains substantive HOA reforms.

That was back on March 28th. Today, the bill has been held in “limbo” for a month by the Speaker, David Gowan, whose powers allow the Speaker to control when and if a bill gets to a final vote. Approval in this final vote would have sent the bill to the Governor for signing. As the legislative session is in its last days, pending budget approval, this bill looks dead by “the establishment.”

This state of affairs came about as a result of a trivial amendment in the Senate by Sen. Kavanagh, a CAI stalwart, making technical changes. As a result, instead of the bill being sent to the Governor, it must go back to the House for approval.  House approval was recommended and the bill should have been placed on the Final Vote agenda within a week, as typical.

Arizonians! Your support is necessary to move the bill!  Email Speaker Gowan (dgowan@azleg.gov)  and sponsor, Eddie Farnsworth (efarnsworth@azleg.gov), urging the Speaker to allow the voice of the people, the legislators, to vote on the bill and stop “the Establishment” control of legislation.

Published in: on April 29, 2016 at 6:38 am  Comments (5)  

CAI opposes CA HB 1720 member’s attorney representation

HB 1720 seeks to correct the deficiencies in existing law in a very limited manner.  All it allows — read the bill carefully and compare it to the misinformation and fear mongering by CAI – is for the attendance of any attorney at a board meeting.  It does not make any changes with respect to participating in discussions or voting as CAI asserts would happen.  The HOA still controls all other aspects of attendance at board meetings.

CAI’s Call To Action urges opposition to the bill.

“In sum, AB 1720 is an unwarranted disruption to proper and orderly board discussions, causes unnecessary expenditures to associations, and will intimidate volunteer board members”. CALL TO ACTION: NO on AB 1720 Attorneys at Board Meetings  (April 15, 2016).

In its Blog, an active CAI attorney wrote, “While some may think this is a “common sense approach” to allowing members to protect their rights, it ignores the reality of how associations operate.”  Attorneys for Association Members at Every Board Meeting?  In his blog, CAI stalwart attorney Swedelson posted several calls to oppose HB 1720. Let me conclude by saying that I believe that AB 1720 will cause an unwarranted interference to proper and orderly board discussions.”  Oppose California Assembly Bill 1720 (April 13, 2106).

Why is CAI so worried?  Let’s ignore CIA’s hype, half-truths, and fear mongering statements and deal with the issues.

HB 1720, in the short subsection (c) amendment to Civil Code 4925, simply reads:

The board shall permit an attorney who represents a member to attend any board meeting that the member is permitted to attend, regardless of whether the member attends. Where possible, the member shall give the board at least 48 hours advance written notice that his or her attorney will attend the board meeting. 

What is the problem with allowing a member’s attorney from attending a meeting that the member could attend?  It is accepted practice to allow for proxy voting whereby a member is not present and another appointed person votes in place of the non-attending member.  What’s the problem?  There is none if the board is acting in good faith, and has nothing to hide, which CAI seems to have implicitly acknowledged in its opposition to the bill.  “ignores the reality of how boards operate,” and “disruption to proper and orderly discussion.

We know how boards operate, and it ain’t like what is written in the laws or governing documents, where the common defense by the board is, “this is what our attorney told us” without any written evidence or confirmation from the attorney.

Swedelson did a good job by reminding his readers that the laws are pro-HOA and that the CC&Rs are adhesion contracts, both which lack true opposing party, the homeowner party to the CC&Rs and the absence of homeowners in the stakeholder sponsored HOA bills.  He points out, quoting from SB Liberty v. Isla Verde (2013),  that 1) the CC&Rs only allow members to participate or attend, and are silent on “or his representative,” 2) attorneys cannot attend, 3) the board decides who may attend meetings, 3) and that the California statutes basically state the same restrictions as the governing documents.

Now any rational, objective person does not need any argument as to the lack of fair treatment and the injustice fostered upon the owner by “the law,” deriving him of his private property rights. These property rights would be protected under the Bill of Rights if the HOA were treated as a public entity.

What the bill would do, as I’ve pointed out elsewhere, is to allow the non-lawyer member to have an advisor present to hear and see, and have his client raise his questions.  What’s wrong with that?   If this is a serious problem for CAI and the board, then it is definitely a serious problem for the members.  

Based on CAI’s strong opposition, they fear being held accountable to questioning by competent attorneys.

Published in: on April 15, 2016 at 8:15 am  Comments (4)  

CAI says HOAs are more ‘creatures of statute’ than contractual

Memo 3This Research Memo focuses on the Illinois Supreme Court opinion in Spanish Court. Excerpts from the Memo —

Assessments are like taxes with no contractual right to offset ‘failures to perform.’

[CAI argued]

Although contract principles have sometimes been applied to the relationship between a condominium association and its unit owners based on the condominium’s declaration, bylaws, and rules and regulations the relationship is largely a creature of statute, defined by the provisions of the Condominium Act.

For the same reason that taxpayers may not lawfully decline to pay lawfully assessed taxes because of some grievance or claim against the taxing governmental unit, a condominium unit owner may not decline to pay lawful assessments.

The very real impact of the Second District’s  decision [appellate court validating the withholding of assessments for the HOA’s failure to perform] is peculiarly analogous to our government’s need to collect taxes free from objection by individual taxpayers. Surely, if people could refuse to pay taxes and then defend against their collection based upon a claim that the government had been negligent in the maintenance of public spaces and providing services, the government would find itself in dire financial straits and unable to fulfill its obligations.

Read the full Research Memo No. 3.

 

Published in: on April 7, 2016 at 4:42 pm  Comments (1)  

Activist judges & implied HOA covenants

As a general principle, it is a self-feeding cycle whereby unjust, pro-HOA laws serve to further create unjust judicial precedent.  Homeowner justice is repeatedly denied as more and more cases rely on bad court opinions based on unjust laws, solidifying the strength and weight of these earlier cases that serve as precedent.  It is a primary cause of the failure to obtain justice for homeowners in HOAs.

Reflecting this considerable body of law, the newest version of the Restatement of Property (Servitudes) provides that “a common-interest community has the power to raise the funds reasonably necessary to carry out its functions by levying assessments against the individually owned property in the community….” Restatement (Third) of Property: Servitudes § 6.5(1)(a) (2000). In addition, as explained in a comment to that section, the power to levy assessments “will be implied if not expressly granted by the declaration or by statute.” Id. at § 6.5 cmt. B.

(Florida Supreme Court opinion in Evergreen Village).

Read the full Research Memo, No. 2

Published in: on April 2, 2016 at 12:58 pm  Comments (1)  

Landmark HOA legislation restores homeowner property rights

In state legislatures rejecting HOA “ex post facto” amendments I mentioned 2 bills that gave limited protection to homeowner property rights in regard to ex post facto amendments that constitute an eminent domain taking.  Idaho’s HB 511 was signed into law by the Governor on March 24th, and Arizona’s HB 2382 is a technical done-deal as the House agreed to accept the Senate’s technical corrections, which would then be sent to the Governor for signing.

Idaho HB 511:  “No homeowner’s association may add, amend or enforce any covenant, condition or restriction in such a way that limits or prohibits the rental . . . unless expressly agreed to in writing at the time of such addition or amendment by the owner of the affected property.”

Arizona HB 2382“AN AMENDMENT TO A DECLARATION MAY APPLY TO FEWER THAN ALL OF THE LOTS OR LESS THAN ALL OF THE PROPERTY . . . (b) IF THE AMENDMENT RECEIVES THE AFFIRMATIVE VOTE OR WRITTEN CONSENT OF  ALL OF THE OWNERS OF THE LOTS OR PROPERTY TO WHICH THE AMENDMENT APPLIES.”

Idaho’s bill needs no explanation. It is a property right of the owner to lease his home if he so desires, and that constitutional right cannot be taken away by the HOA.

Typical applications of Arizona’s bill could in regard to no longer permitting certain trees landscaping and a mandatory removal of these unacceptable landscaping, or disallowing certain home colors or external features like shutters or attached awnings, etc.  How about lot owners facing a drainage ditch or right of way road that was maintained by the HOA and is now to be maintained by those homeowners?

Just one no vote by a homeowner whose CC&RS at the time of purchase said that the HOA was responsible would kill the amendment.  Keep in mind that there may have been several earlier versions of the CC&RS as a result of prior amendments, which would then make the attempted amendment applicable to less than all lots or owners.  Or, not all units have an outdoor deck.

Please note the absence of compensation for the loss of property rights.  Heaven forbid that the law, in the interest of justice and fair play, would ask the HOA to pay money to affected homeowners.  While America survived for over 240 years with this requirement, the defective HOA scheme needs the legislature to bail it out and not require fair compensation.

Gee, the HOA might fail.  The other members would not pay for it under their version of “it ain’t fair” mantra.  HOAs would lose their appeal.  Oh my gosh, plead the legislatures, we can’t let that happen. We got a good thing going here.

Published in: on March 30, 2016 at 7:38 am  Comments (2)  
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