the role of homeowners is simply to provide corporate HOA revenues

On today’s This Week on ABC, the host described Ferguson’s policy, based on the DOJ’s report, as “taxing those in poverty for revenues rather than treating them as citizens.” I believe, as fellow activist Donie Vanitzian has repeatedly stated in Villa Appalling! [1], the purpose and function of homeowners in HOAs is to provide revenue for the HOA government [2] rather than treating them as citizens of the HOA.

I don’t think that the HOA Stakeholders, led by the self-anointed national lobbyist educational organization, would dare now argue that homeowners are indeed citizens of the corporate HOA business.  It would be an oxymoron.  I don’t think homeowners realized that their purchase solidified them as guarantors of the HOA’s survival in that their homes were pledged as collateral for their continued payment of assessments.  This pledge is implicitly contained in the CC&Rs, which they supposedly agreed to with full knowledge.

Notes:

  1. Villa Appalling!: Destroying the Myth of Affordable Community Living, Vanitzian and Glassman (Villa Appalling Publishing 2002).
  2. Numerous court cases have upheld a “pay until you die” doctrine found in state statutes and HOA CC&Rs. Homeowners are denied the legal protection of FDCPA, by simply filing a certified letter, of no payments until disputes are clarified.  Homeowners are not even allowed to place disputed amounts into an escrow account.  Numerous court cases have defended this special application of the law as a matter of the HOA’s survival.
Published in: on March 8, 2015 at 9:52 am  Leave a Comment  
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SB 1008, Virginia’s ‘HOA Bill of Rights': an illusion of justice

The Virginia Legislation passed SB 1008 that modified the Code of Virginia adding a “Statement of Lot/Unit Owner Rights,” sections 55-79.72:3 and 55-509.3:1.  It sounds like a Bill of Rights, but the 5 items merely repeat existing law without meaningful and effective enforcement.

Consider that Virginia has a constitutional Bill of Rights, Article 1, that contains section 14,

Government should be uniform. That the people have a right to uniform government; and, therefore, that no government separate from, or independent of, the government of Virginia, ought to be erected or established within the limits thereof. 

It seems that HOA private governments violate Virginia’s Constitution.

Furthermore, take the first 2 clauses of Section 11, “That no person shall be deprived of his life, liberty, or property without due process of law; that the General Assembly shall not pass any law impairing the obligation of contracts.”  Compare the “fine print” of SB 1008 that adds, “the right of due process in the conduct of that hearing(my emphasis), referring to the section on enforcement of rules, (Sec. 55-513 or 55-79.80:2).  The enforcement section specifies the hearing in accordance with the [governing] documents, the member shall be given an opportunity to be heard and to be represented by counsel before the board of directors or other tribunal specified in the documents.”  Does that mean that the counsel is restricted to seeing that the homeowner is allowed to be heard, or is there more?

I have not come across a governing document that calls for hearings that allow presentation of documents and witnesses and the questioning of this evidence, or that the tribunal be an independent body. My point is, What does due process meaning in the context of SB 1008?  Is it under the constitutional bill of rights meaning, or constrained by the CC&Rs and bylaws private contracts?  Sounds like same ol’, same ol’.

Legislation without effective enforcement through monetary penalties is merely a recommendation that relies on the good faith of the parties, namely the board and its attorney and manager advisors.  But, we know all about the good faith acts of many of these responsible parties, especially those of rogue boards that ignore the laws and governing documents or knowingly violate them with impunity.

It would have been so much simpler to have these details spelled out in this one page bill if, indeed, justice for homeowners was sought.

Published in: on February 22, 2015 at 9:40 am  Leave a Comment  
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Unconstitutional delegation of power to HOAs

Article I. Section 1, of the US Constitution states that “All legislative powers herein granted shall be vested in a Congress of the United States” and nowhere in the Constitution is there any mention that Congress can delegate its exclusive law making powers to any other branch of the government or to any other organization.  State constitutions have similar wordings like that of Arizona, “The legislative authority of the state shall be vested in the legislature, consisting of a  . . . .” 

The legislative authority and powers of the state are past down to subdivisions of the state known as cities, towns, counties, taxing districts, etc.  These powers are said to be delegated from above to the subdivision, and it is common sense that if an entity does not have the power then it cannot delegate that power to anyone else.

This delegation of authority is carried out through a state’s municipal corporation and county laws (and to executive agencies by means of enabling acts of authority).  Reading the municipality laws reveals authority for a defined territory, large or small and often referred to as a community, to elect a governing body, establish courts, make laws and ordinances (rules and regulations), enforce laws, have courts, have a police department, establish fines for violations, have a jail, and to assess residents and collect taxes.  All under the approval and oversight of the state legislature.  These subdivisions are also known as state entities, public bodies or arms of the state.

We must first, once again, decide if HOAs are state actors and arms of the state like any other municipality, or are they just private nonprofit corporations. If found to be a state actor, the 14th Amendment applies and no further investigation into the constitutionality the delegation of legislative authority is necessary.

HOAs as state actors

Let’s start anew and compare state constitutions and city/town charters with the duties, powers and functions of the homeowners association governing body widely set forth in its declaration of conditions, covenants and restrictions (CC&Rs). The CC&Rs declares and defines the authority for the HOA to act in certain manners. We can easily see almost identical powers and duties with municipal corporations, far more so than can be found in a business charter, as CAI like to argue, or in a nonprofit charitable organization, or in a professional association, or in a trade association, or in a union charter, or in a for profit property management service business.

Seeking, attaching and using special meanings to common everyday words and concepts to fit a square peg in a round hole, as the pro-HOAs forces have made an art form, flies in the face of reality.  CAI likes to argue that assessments are not like taxes, that fines are not penalties for violations, rules and regs are not ordinances, etc. Dismissing these special definitions, HOA CC&Rs are almost identical to municipal charters of authority, which becomes quite apparent when we strip away these contrived definitions of words and look and the total picture that reveals the entire intent of the CC&Rs.  And that’s to govern the subdivision or community, to regulate and control the people within the subdivision.

In effect, HOAs are de facto political governments.  I choose the description of HOAs as a political entity and not a quasi or mini-government, because it more accurately describes the nature of the governing body – ruling over people in their homes. As I recently wrote,

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.[1]

The argument has been made that HOA governments are equivalent to municipalities with respect to powers, duties and authority and as such are indeed state actors subject to the 14th Amendment’s restrictions.

 

Unconstitutional delegation of legislative powers to HOAs

We must now address the argument that HOAs are not state actors, but private actors or entities not subject to the 14th Amendment.  We need to determine the legitimacy and constitutionality of these private actors, these private corporations formed under a private agreement. This takes us back to the question raised in the beginning of this paper of the constitutional delegation of legislative authority and powers not to agencies, but to private entities.

(The case where it is believed that there was no delegation to HOAs at all will be addressed below.)

This question of delegating legislative powers, or the non-delegation doctrine, has, like constitutional questions, undergone multiple court opinions resulting in a complex web of: what is the law?  To make things short, my layman’s summary comes down to deference to private entities, because they know better about their business or corporation than does the court.  And if the owners have elected a governing body, then that body speaks for the owners. A prime example of this judicial philosophy that should be familiar to most homeowners is the business judgment rule. The board knows best, unless it can be shown that it has acted unreasonably.

Sadly, the courts have shown less and less concern for constitutional intent and values or in protecting individual rights in favor of a money oriented practicality of efficiency of government — one that favors the privatization of legislative authority.  Yes, I know, confusing and unbelievable, but remember the quote from the Forward in The Restatement,Therefore this Restatement is enabling toward private government.”[2]  Private actors (unlike the executive branch) have virtually no public accountability, and legislatures may be too busy to address their misdeeds by repealing legislation. Checks and balances and government oversight are of little concern as we are quite familiar with their absence in HOA state laws.

I can hear CAI shouting, way over here, that there is no delegation of legislative powers to private HOAs!  Precisely! There are no enabling acts granting HOAs such legislative powers. That makes CC&Rs and HOAs an unconstitutional usurpation of legislative authority.  If municipal corporations, agencies and private entities must have delegated authority to act, no matter how broad or detrimental to individual rights, then how can HOAs not be outside our constitutional system of government?  Even a state’s most liberal adoption of the home rule doctrine requires allegiance to the state and US constitutions. (See HOAs violate local home rule doctrine and are outlaw governments).

Our government cannot look aside and ignore this assault on the foundations of our system of government!  We cannot tolerate everything goes, especially self-anointed political governments.

In defense of this unacceptable attitude by elected officials, it can be argued that even though there may not be explicit delegation there is an implied delegation of legislative powers, based on the nature and intent of the state’s HOA acts and statutes. These state laws permit those functions and powers of a municipal government, as stated in above, that regulate and control the peoples within a subdivision, large or small.

(Some states do have a statement of general government interest to overcome any judicial scrutiny as to constitutionality under the 14th Amendment, which can be challenged. The basis is that the statutes also contain serious harm to others.  In Shelly, “the States have denied petitioners the equal protection of the laws and that, therefore, the action of the state courts cannot stand”[3] and that constitutional rights were denied.)

US Supreme Court to address delegation to private entities

The question of the delegation of legislative powers to private entities is now before the US Supreme Court in DOT v. Association of American Railroads.[4]   Stephen Wermiel writes that “The Solicitor General argues that there is no unconstitutional delegation to a private entity because government officials retained control . . .[5]   We know this is not true with HOA statutes.

Wermiel continues,

The Supreme Court must decide if the delegation of authority to Amtrak is an unconstitutional grant of legislative powers to a private entity. To reach that decision, the Justices must decide if the authority given to Amtrak by federal law is legislative in nature, and whether Amtrak is a private corporation or a public entity.[6]

Either way, whether HOAs are de facto political governments and state entities, or are an unconstitutional delegation of legislative powers, they can only legally function as an arm of the state under the restrictions of the 14th Amendment.

References and authorities

[1] See CC&Rs are a devise for de facto HOA governments to escape constitutional government.

[2] Restatement Third, Property: Servitudes (American Law Institute 2000).  The full statement reads, 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 . . . .”

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

[4] DOT v. Association of American Railroads, No. 12-1080 (SCOTUS).

[5] Stephen Wermiel, SCOTUS for Law Students: Non-delegation doctrine returns after long hiatus.  (SCOTUSblog Dec. 4, 2014)

[6] Id.

please sign Change.org petition to regulate HOAs and limit CAI influence

I received this email from Suzanne and signed.  I urge all those fed up with the HOA abuse and injustice to sign it ASAP.  Visit limit CAI

“Enact legislation on a state and federal level regulating condominium and homeowners associations and limiting lobbying power of the Community Association Institute”

Published in: on January 29, 2015 at 1:08 pm  Comments (8)  
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model HOA regulatory agency bill

shockingThe attached was submitted to AZ legislators.  The model bill should be tailored to your state’s laws.  The sections under 41-2000 et seq. are the amendments that should be included as part of any similar effort to create a level playing field for homeowners.

 From: George

Sent: Monday, January 26, 2015 6:11 PM

Subject: department of HOA is desperately needed as DFBLS is doomed

Dear Arizona Legislators,

I quickly put together a solid bill (attached) based on a Florida bill and adapted to Arizona to help relieve continued legislative involvement in what should be handed by a bona fide regulatory agency.   I took pains to write a good bill in conformity with the drafting requirements and I hope it will ease your review.

I well understand the current atmosphere of no government interference, but the gross and shameful treatment of HOA members by the HOA stakeholders demands justice.  It is not a question of misplaced dogma, but of treating all the people equally under just and fair laws.

The proposed bill summary reads:

Summary.   This bill establishes a department of homeowners associations with full direct regulatory authority over Ch.9 and Ch. 16 associations under the direction of a commissioner. It provides for receiving complaints, investigations, filing legal actions, issuing civil penalties, rulemaking, and establishing an Advisory Board to provide recommendations to the commissioner.  Funding is provided by a $4 per unit fee per year.  The processing of HOA disputes by DFBLS is stricken.

My proposal brings a more level playing field in that the proposed Advisory Board will be balanced in favor of the members, and does not consist of any HOA stakeholder vendor lawyers or managers.  It’s the people’s vehicle for justice.

I urge you to stand behind the effort and sponsor the bill, and campaign for its passage.  I will be happy to meet with any legislator to explain the bill and answer any concerns.

Respectfully,

George K. Staropoli

Published in: on January 27, 2015 at 5:56 pm  Comments (9)  
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