HOAs and unauthorized practice of law

I just received a copy of a letter from a homeowner in which the HOA manager explains the rights of the homeowner under the CC&Rs.  This is not an uncommon occurrence, where untrained and uneducated managers, even if they are  a Certified Legal Document Preparer (independent paralegal), make such statements in response to a homeowner’s request  “to know”.  The average homeowner is not familiar with the law and usually doesn’t understand what the rules mean or say.  And, obviously, the same goes for these HOA managers, including those with those CAI “certified” as to training designations — PCAM, AAMC, etc.
 
The manager, in defense of a board rule change, had misdirected the homeowner by quoting a section of the CC&Rs that grants the board to the right to create rules and regulations.  However, the issue at hand and pointed out to the manager, limiting the number or dogs, is not specified in the CC&Rs, which simple says dogs may be kept.  Consequently, the CC&Rs would have to be modified accordingly to specify any limitation, not by a vote of the board, but by the members.  This is both unethical and an outrageous unauthorized practice of law, which I shall say once more, occurs all too frequently under HOA regimes.
 
The letter did not contain a disclaimer that, “I am not giving legal advice or opinion, and I am not an attorney nor employed by an attorney.  You should seek independent legal advice from a competent attorney.”  (Remember that the HOA attorney is just that, the attorney for the fictitious HOA and not for the opposing party, the homeowner.) This simple disclaimer never appears on statements made by HOA managers, in violation of Arizona, and all other state UPL (Unauthorized practice of law’) restrictions.  Under  the Arizona Rules of the Supreme Court, R 31(a)(2)(A), “‘Practice of law’ means providing legal advice or services to or for another by: (5) negotiating legal rights or responsibilities for a specific person or entity.”
 
Rule 31(a)(2)(B) states:  “‘Unauthorized practice of law’ includes but is not limited to:  (1) engaging in the practice of law by persons or entities not authorized to practice pursuant to paragraphs (b) or (c)”
 
 
Subsections (b) and (c) state that UPL occurs when a person is not a member of the State Bar, including a disbarred or restricted Bar member.
 
 
IMPORTANT
 
If you receive any such letter from a manager or management firm employee, and that letter does not contain a disclaimer, please file a UPL complaint against the manager.  This is the only way to stop this practice.  It is a small thing you can do to help yourself and all other people living in an HOA.  If a director writes such a letter, then he risks personal liability for his error since he did not consult an attorney.  If he claims “acting on the advice of the attorney”, demand to see it in writing!  If he does not provide it, then he is not acting in good faith as required of directors of nonprofit corporations.
 
 

Qui Pro Domina Justitia Sequitur 

 (“who prosecutes on behalf of Lady Justice?“, DOJ seal)

 

 
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HOA demographics: About 25% Arizonans live under HOA regimes

Continuing my investigation into HOA demographics, I researched the percent of the Arizona population living under a homeowners association government.  Surprisingly, that game to 23.4%.

 As a very good indicator, although subject to a more refined analysis, data from the Arizona Corporation Commission records showed 7,297 nonprofit corporations with one of the following words in their names: HOA, homeowners association, condominium, condo, property owners association, and community association.  Based on industry data from CAI, the following averages were obtained over nine entries, spanning 1970 through 2009:

 average residents per HOA:            211

average Units per HOA:                    82

average residents per Unit:              2.6

 The analysis reveals an estimated 600,069 HOA units and 1,543,067 people living in HOAs, based on a 2009 Arizona population estimate of 6,595,778.  That’s 23.4% of the people subject to a second form of local government, the HOA, with their constructive notice constitutions not subject to or approved by the state of Arizona, that deny the constitutional protections of due process and the equal application of the Arizona laws.

 

HOA demographics: Arizona Hispanics

 

Earlier I presented demographics from a 2007 CAI study in HOA satisfaction that alluded to the homeowner association resident population being significantly different from the general  population[i].    From the survey, the demographics showed that HOA residents are non-minority, educated, well off seniors.   Either the CAI – Zogby sample was biased or it was representative of the general HOA population.

Being curious as to whether HOAs admit to a segmentation of the general US population, I conducted a non-scientific, “take a peek” analysis of my own. My methodology selected 25 HOAs at random in Maricopa County, AZ, and to look at the single issue of Hispanics living in HOAs.  Because of the lack of accessible data, I relied on subdivision lot ownership records with Spanish surnames as my criteria for Hispanic ownership.  I obtained data on the 8 city/towns represented by the sample HOAs, as well as state and county data[ii]. 

The table below compares the city/town Hispanic percentages, based on the 2000 Census,  with the results found from the HOA county records.

Town/city Census HOA
         
Chandler   21%   5.4%
Gilbert   12%   3.1%
Phoenix   34%   22.2%
Scottsdale 7%   0.7%
Queen Creek 30%   3.6%
Peoria   15%   10.5%
Surprise   23%   11.6%
Avondale   46%   26.8%
         
  AVG 24%   10%

 

The 2000 Census showed a population of 25% Hispanics in Arizona and the sample shows 24%, with the HOA sample average of only 10%. The 2008 update gave a 31% Hispanic population in Maricopa County.  The deviations from the Census population data indicate that the Hispanic population in HOAs did not conform to the overall county data, and that HOAs have a significantly smaller Hispanic population. 

Now, seeking an explanation for this result, I reasoned that this smaller population figure could be the fact that Hispanics in Arizona own a smaller proportion of the homes than non-Hispanics.  In fact a study by HUD based on 2000 Census data revealed about a 50% reduction in ownership of homes for Hispanics:  24.8% for non-Hispanics vs. 12.4% for Hispanics (see Ownership, appendix table 1A,, n. 2).  Even with this substantial reduction in the number of Hispanic owners expected to be found by this analysis of county ownership records, the sample still reflects a significant difference from the Census data.

This question of HOA demographics needs to be given serious study and appropriate research conducted, since there is the implication that HOAs are a vehicle for class structure within the US.  Local governments increasingly support, and even mandate, an  HOA for all new home construction.  And, additionally, that the HOA form of government repudiates the US Constitution, and denies homeowners the equal protection and due process of law in pursuit of an empty statement of maintaining property values.

Notes

[i] See 2010 US Census ignores HOA demographics.

[ii] Ownership in Maricopa County, http://www.huduser.org/Publications/PDF/hisp_homeown7.pdf; population data from http://quickfacts.census.gov/qfd/states/04/0412000.html.  The data was based on the 2000 US Census and 2008 interim data.