Does CAI act in good faith for the benefit of the people in HOAs?

Arizona’s Augustus Shaw IV, only recently joining CAI’s College of Community Association Lawyers, was enjoined from running for state representative by a Maricopa superior court decision.  Shaw was found to live in District 20, but wanted to run in District 17, and having given a number of justifications for living in District 17 as opposed to District 20.   Now, it should be quite simple, even if you are not a lawyer, to know where one really lives, unless you are looking “to pull a fast one.”  See the Minute Entry, http://www.courtminutes.maricopa.gov/docs/Civil/062010/m4270712.pdf. 

Is this the caliber of membership in CAI’s self-proclaimed lawyer’s “honor” association?    What will CAI do, since it has a code of ethics, supposedly both for  members and a CCAL members?  I have not seen any evidence or documentation in my 10 years of watching CAI that any action was brought against a member or a CCAL member for violations of the respective codes of ethics

And what about those state legislatures and town councils that employ CAI as the official educator of HOA boards and property managers?  What will they do?  They should be watching for a strong indication that CAI  removes members not of good character and standing, and who display unethical conduct, especially if they are a lawyer.  Why?  Because state legislators have operated under a mistaken presumption that HOA boards will conduct themselves in good faith and obey the laws  —  even without any threat of punishment. 

But, the record repeatedly shows otherwise.  Abusive HOA boards ignore the laws knowing that homeowners will not go to court against the experienced HOA/CAI attorneys.  CAI, that powerful national lobbying trade group, has claimed over the years, before the legislators, that they speak for the homeowners, and what CAI argues is also what the homeowners want.  But, we know better.  Do you really think a homeowner wants his home as collateral for the survival of the HOA?  Or really agrees to being foreclosed on for a mere $200?  Or willing surrenders his right to due process in favor of HOA kangaroo courts?  Get real, legislators!  Get real! 

CAI proposes and supports HOA laws for its own self interest and does not deal in good faith.  The CAI attorneys act as hardnosed defense councils against the homeowner, and do not recognize a fiduciary obligation to the owners of the HOA, the homeowners.  They see it purely as a management vs. employee relationship, and they are on the management side.  CAI does not see, nor does it want ever to admit to any de facto government status, that the HOA is an authoritarian form of political government and an anathema to our democratic system of government. 

If CAI is really acting in good faith for the benefit of the people living in  HOA territories, it will seek the dismissal of Augustus Shaw from its CCAL.

Undemocratic HOA governments: Politburo federalization

I am not surprised by the silence to my Blogcritic article, ” HOAs: Unrecognized De Facto Local Political Governments ”   It takes time to absorb, since there is the shock that this is happening not in a European or third world country, but here in the US of A. 

In an email back in the summer of 2006, when first writing about the broader impact on constitutional principles by these private governments,  I had the analogy of the Communist Politburo in my mind.  I wrote, in regard to writing another article,

 I will allude to CAI as the modern equivalent of Communist Russia’s Politburo that, from its HQ in Alexandria, VA, has sent its faithful and loyal followers to every state legislature to undermine the American system of government. With less that 17,000 members, smaller than the members of the Arizona Assn. of Realtors alone, CAI controls public policy with respect to the homeowner association governance of condominiums and planned communities.  While its membership represents less than 6% of the homeowners associations in the US as estimated by CAI, its lobbyists control legislation with respect to HOAs in almost every state of the union.

 As added documentation as to where the promoters and supporters of the HOA legal scheme,  are taking us — those legal-academic aristocrats as I refer to them —   here is a real example of a “federal,” Politburo government in Arizona.  The governing structure of Anthem in Maricopa County, AZ, a master community contractual government, binding homeowners under the servitude law of constructive notice, is such a Politburo.  It has a federalized form of government, drafted in 1999 by longtime legal-academic aristocrat Wayne Hyatt, setting out a central government, the Anthem Community Council, ACC, (those socialistic terms) that has no members and is governed by a board of directors.  As the owner/declarant of all the properties to be known as Anthem, it unilaterally declared that,

 To pay for the Council Expenses, all Owners, through an Association or directly, shall be obligated to pay assessments, fees, and other charges as set forth in this Community Covenant . . . This Community Covenant shall be binding upon all Persons having any right, title, or interest in any portion of the subjected real property, their heirs, successors, successors-in-title, and assigns.

 The ACC further binds all property owners who are subject to an association governing a phased subdivision, as hereby subject to this ACC.  In other words, ACC is the federal arm, or more accurately, the Politburo, overseeing the resident-citizens of the Anthem territory and all Anthem subdivision “state” governments.

 BTW, have you noticed the socialist terminology?  In the various state laws, HOAs are called “planned communities”, and Anthem has a “community council,” and there’s the “communal living” aspect of HOAs (described as such by NJ Justice in the Twin Rivers case).  Yes, folks, right here in the good ol’ US of A, and nobody cares.  Not even any of the political parties, or public interest organizations, or the media.

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.