HOA-Land Nation publication to aid constitutionality

The important question of HOA constitutionality has generally been avoided and given token lip serve by all interested parties: homeowners, homeowner rights advocates, state legislators, real estate departments, attorney generals, nonprofit private entities proclaiming a defense of the Constitution, and the media at large.

Even the renowned Wayne Hyatt’s[1] statement in 1976 went ignored.

“One clearly sees the association as a quasi-government entity paralleling in almost every case the powers, duties, and responsibilities of a municipal government.   All of these functions are financed through assessments or taxes levied upon the members of the community, with powers vested in the board of directors, council of co-owners, board of managers, or other similar body clearly analogous to the governing body of a municipality.”[2]

Clearly challenging the constitutionality of the HOA model of local government and legal scheme is well beyond past due. To correct this horrific and inexcusable oversight I have published, The HOA-Land Nation Within America,[3] a white paper, an exposé of the HOA legal scheme violations of the Constitution. The eBook and paperback editions can be found on Amazon.

This task of constitutional HOA reforms may appear overwhelming and almost impossible to achieve, but constitutional HOA reforms can happen. It will take tremendous effort and perseverance, and a “never give up” mentality. David Cole passionately makes this point[4]

“If Americans now and in the coming years insist that . . . our most fundamental values, including equality, human dignity, fair process, privacy, and the rule of law, and if we organize and advocate in defense of those principles,” we will succeed in bringing about the necessary fundamental and constitutional reforms to the HOA legal scheme in existence since the HOA “bible” was released in 1964. In order to accomplish this important task, “it will take a persistent civil society, a vigilant media, brave insiders, and judges and other government officials who take seriously their responsibility to uphold the Constitution. But first and foremost, it will take an engaged citizenry.”

The defense of liberty depends . . . on citizens engaging collectively to fight for the values they believe in. . . . The preservation of liberty through a written constitution . . . has survived . . . because ‘we the people’ have consistently taken up the charge to define, defend, and develop liberty in our own image, so that it reflects our deepest commitment , not just those of a privileged elite who do not represent us.”

It falls upon the homeowners in HOAs, as has always, to advance constitutional arguments that are valid and credible.    And that takes knowledge and understanding of the issues.  The HOA-Land Nation, and other of my publications and Commentaries, as well as those of others, provide the “ammunition” that will pass the valid and credible challenges to be expected from CAI and other lawyers, provided the arguments do not get bogged down in irrelevant arguments from the opposition.

CAI cannot handle a broad Bill of Rights challenge. Period!  I have never been challenged  by CAI because they well know that they are defending the defenseless.

Read the book, paperback or eBook, and spread the word.  Use it in those many HOA violations where state statutes support the HOA.  Work to hold seminars and conferences to openly discuss the issues raised in The HOA-Land Nation.  Expose their defense of HOAs, now!

 Notes

[1] Wayne Hyatt was a prominent figure in the promotion of HOA-Land as well as an important person in creating CAI in 1973, serving as its second president.

[2] I have extensively quoted Wayne Hyatt’s 1976 statement on HOAs as mini-governments, as cited in the 1983 California case, Cohen v. Kite Hill.

[3] I have concluded that there exists an HOA-Land Nation within America that is comprised of fragmented and local HOA governments across the country and have designated them collectively as “HOA-Land.”  The commonality of their declarations of CC&Rs, flowing from the 1964 Homes Association Handbook (ULI publication), their shared beliefs, values, traditions, and institutions qualify HOA-Land as a nation.

[4] David Cole, National Legal Director of the ACLU, Engines of Liberty, Basic Books (2016).

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.

Does the Constitution support the will of the HOA no matter what?

A rogue board is operating at Terravita HOA in Scottsdale, AZ. In short, the HOA attorney saw no problem in adding a restrictive covenant that would allow OAH attorney fees regardless of the law that OAH is not allowed to award attorney fees.[1] It was properly passed by the Terravita members. Since the validity of the covenant was not challenged, the following scenario evolved.

Based on the wording of the covenant, the sole target was a resident, Mr. Brown, the only person who meets this classification in Terravita. Section 17.01, Article XVII, of the Terravita Declaration reads,

[I]n bringing claims against Owners or defending claims brought by Owners in an administrative action or proceeding, including but not limited to, proceedings before an Administrative Law Judge, and any appeal thereof; the Association shall be entitled to recover its attorneys’ fees and costs from the Owner involved in the administrative proceeding if the Association is a prevailing party in such action, and the amount of such attorneys’ fees . . . .

The battle between Brown and the board also involved CAI attorney Ekmark, where there is plenty of history, Brown having filed several suits and won them and publicized the amount of HOA funds spent on minor litigation.

In this instance, Brown was seeking access to board minutes at a meeting alleged to be an executive meeting where the minutes are exempt from disclosure. The problem, according to Brown, was that he was not allowed to present evidence that the meeting was not an executive meeting.  The court simply took Ekmark’s word that it was an executive meeting.

Being the prevailing party, the HOA then claimed attorney fees for the OAH appellate costs, the basis of Brown’s current appeal (CA-CV 14-000455, Division 1). (I avoid the other pertinent legal issues involved in this case and focus on the validity of the covenant.)

The question I raise is that the covenant was invalid, being an unconstitutional deprivation of due process and the equal protection of the law. Once again, like the CC&Rs, can a private organization draft a document or rule that conflicts with state law and yet be held legally binding by the courts? (When does it stop?) And since the covenant was enforced by the courts, there are grounds for filing a deprivation of rights suit under 41 USC 1983[2] (“under color of any statute”) and claiming state action by Terravita.

Understand that, in general, court enforcement of a CC&Rs agreement to abide by the majority decision under a valid amendment procedure alone fails to uphold the principals of our democracy.  The Constitution does not say that the majority is always right.  The 5th and 14th Amendments do not contain exceptions like, “

no person shall be deprived of life, liberty or property, without due process of law (5th & 14th Amendments) . . . nor deny the equal protection of the law (14th Amendment) unless approved by a majority or supermajority vote as contained in the governing documents.

The case before us is another example of judicial populism that holds that the will of the majority shall prevail no matter what.  How far have the courts gone in ignoring the Constitution and allowing unrestricted private individual or group “rewrites” of the Constitution to be binding? 

By such court activism, the America of today not the America of your father or your grandfather.

References

[1] OAH, the Office of Administrative Hearings, is an executive agency obtaining it powers and authorities from the legislature’s enabling act.  The statutes (ARS 41-1092 et seq.; 41-2198 et seq.) and Administrative Code (R2-19-101 et seq.) do not grant the OAH the power to award attorney fees.

[2] 42 USC 1983, Section 1983. Civil action for deprivation of rights

 “Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such    officer’s judicial capacity, injunctive relief shall not be granted  unless a declaratory decree was violated or declaratory relief was    unavailable.”

HOA laws that fail to protect the people from harm

I have written many times about the loss in the protections of individual rights, freedoms, privileges and immunities that continues in our country.  I wrote about the presumption that all laws passed by the legislature are constitutional, because, apparently, the sovereign can do no wrong.  After all, the legislature is the voice of the people, isn’t it?

BUT, this false analogy to the king can do no wrong ignores the fact that the king was not bound by any constitution or charter, and was free to do as he pleased.  But, we have, or are supposed to have, a constitution with restrictions on government.  We also have the doctrine of judicial review of legislation, subjecting the laws to pass judicial scrutiny.

Of the three levels now part of the doctrine of judicial scrutiny, the peoples’ rights fall into one of three categories. The least protective is a legitimate, rational government interest (basically anything the government says is important to the people goes); the strictest is a compelling and necessary interest, reserved for explicit fundamental rights violations.

I have always been bothered about many HOA laws purported to be in the best interest of the people, yet deprive or deny a category of people, those living in HOAs, of their constitutional rights (free speech in many forms, due process protections) and the equal protection of the laws. In Arizona, for example, the horrendous SB 1482 omnibus (read ‘ominous’) bill did just that: granted special rights to HOA managers and left homeowners with unequal legal representation; rejected a private agreement to prevent crimes to allow real estate agents to be able to rent homes in HOAs, a long time frowned upon right.

In the recent Arizona appellate opinion in Vong v. Aune (non-HOA case that explains judicial scrutiny), the court held that, “Courts have found a legitimate purpose lacking where a regulation fails to protect the public from harm.” ¶ 18.  Did I miss something?  Did the Rules Committee that has the duty to check for constitutionality miss something?

Of course the game is still in favor of the government where the burden is put on the homeowner challenger.  He must show that the alleged good for the community is overwhelmingly overridden by the damage to the HOA homeowner public class, and is contrary to public policy. It raises the question of one class of people losing constitutional protections so that others may . . . . may what?

Sadly, public policy as shaped by court and legislative decisions seems to be on the side of the HOA.

When do majority CC&R amendments trample minority rights?

 

The generally accepted legal doctrine upheld by the courts in many states is that any CC&Rs amendment validly passed by the amendment procedures in the CC&Rs is binding on non-consenting homeowners.  This doctrine ignores the content and relevancy of the amendment to the intent and purposes of the drafters, the developer.

The questionable word game involved in this issue deals with the meaning and use of ‘modify’ or ‘change’ as compared to ‘new.’  Does your CC&RS say modify or change, or does it also include the words add or new?  Some courts make no distinction and thereby unconstitutionally modify the CC&Rs contract by depriving non-consenting homeowners of their property rights that they believed they possessed at the time of purchase.

(In general, the dictionaries define ‘modify’ as a change, and ‘change’ to mean ‘to make different,’ but excluding any reference to ‘new.’)

With this presumption in favor of the HOA, these courts fail to determine if this is what the unsuspecting home buyer understands, and that he has been given appropriate notice. Is he aware that ‘change’ also means ‘new’ or ‘add’?  Simply said, we are dealing the ex post facto CC&Rs amendments that deprive a homeowner of his rights without his consent and without any compensation.

In the April 2014, the Washington State Supreme Court opinion in Wilkinson v. Chiwawa,[i] said, wait a minute with respect to rentals.  ‘Change’ or ‘modify’ does not mean ‘add’ or ‘new.’  It held that,

While Chiwawa homeowners knew that existing restrictive covenants could be changed by majority vote so long as the changes were consistent with the general plan, they did not buy into the creation of new restrictions unrelated to existing ones. . . . When the governing covenants authorize a majority of homeowners to create new restrictions unrelated to existing ones, majority rule prevails “provided that such power is exercised in a reasonable manner consistent with the general plan of the development.”

This rule protects the reasonable, settled expectation of landowners by giving them the power to block “`new covenants which have no relation to existing ones'” and deprive them of their property rights.

The Association could not adopt the restriction without unanimous consent. This is the contract into which the parties bought and the expectation that we must uphold.

One of the most notorious examples of this type of amendment occurred in OSCA[ii] where mobile homeowners were forced to pay dues for a country club, owned by the developer and not owned by the HOA, and open to the public on a fee basis.  It helped increase the value of the HOA, was the justification for the amendment.

What does your CC&Rs say?  Watch for those CAI attorney rewrites that sneak these words into your CC&Rs without proper notice, as for example, Arizona requires.

And remember, who writes these state laws?   The  HOA stakeholders that do not include the homeowners!

References

[i] Wilkinson v. Chiwawa, Wn.  No.86870-1, p. 6,7 (April 17, 2014). The issue was an amendment that prohibited short-term rentals when the CC&Rs were silent on duration.  Was it a new covenant or a modification to the one that simple said renting was allowed.

[ii] OSCA Development v. Blehm, No. E320843 (Cal. App. Dist. 4 1999).

IL Supreme Court holds HOAs “are a creature of statute,” and not contractual

Last month the IL Supreme Court opinion in Spanish Court[1] reversed the right of an owner to withhold assessments in view of the HOA’s failure to fix and maintain.[2] In its argument, frequently making use of pro-HOA activist and CAI CCAL attorney in Florida, Gary Poliakoff, the Court stated,

 

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. . . . Although these duties may also be reflected in the condominium declaration and bylaws, as they are in this case, they are imposed by statute and exist independent of the association’s governing documents. Accordingly, a unit owner’s obligation to pay assessments is not akin to a tenant’s purely contractual obligation to pay rent, which may be excused or nullified because the other party failed to perform. ¶ 21.

So much for the sanctity of the CC&Rs contract! The Court, guided not only by Poliakoff, but by a CAI amicus curiae brief,[3] rolls with the punches and chooses when and when not to uphold the contractual nature of the governing documents.

The Court avoided dealing with the equitable aspects of withholding assessments just like withholding rent, rejecting the favorable appellate decision that held,

[T]he obligation to pay assessments, and the obligation to repair and maintain the common elements, as mutually exchanged promises, and concluded that under principles of contract law, a material breach of the repair obligation could warrant nonpayment of assessments. ¶ 7.

Adding fuel to the fire, the Illinois Supreme Court followed the CAI propaganda that the HOA’s survival depends on assessments being paid immediately and without question.

This section [of the IL condo act] was adopted to provide a constitutionally permissible, quick method for collection of assessment arrearages. . . . The necessity of a “quick method” for collection of past due assessments, unencumbered by extraneous matters, is manifest when we consider the manner in which condominium associations operate . . . . the condominium form of property ownership only works if each unit owner faithfully pays his or her share of the common expenses. When a unit owner defaults in the payment of his or her assessments, the resulting forcible entry and detainer action is thus brought “for the benefit of all the other unit owners.” ¶¶ 29 -30.

Permitting a unit owner’s duty to pay assessments to be nullified would thus threaten the financial stability of condominium associations throughout this state. . . . 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. Trustees of the Prince Condominium Trust v. Prosser, 592 N.E.2d 1301.” ¶ 32.

 

Here we have the alleged dicta [non-supported court opinions], and becoming part of the Illinois public policy, that the survival of the HOA/condo is first and foremost. The HOA rises to the same level as a public entity, with the questionable governing documents now having contractual validity and court support to deny homeowner rights, freedoms, privileges and immunities.

 

Welcome to the New America of HOA-Land.

References

 

[1] http://www.state.il.us/court/Opinions/SupremeCourt/2014/115342.pdf.

[2] See appellate decision Court decisions: HOA Enlightenment Movement vs. the Dark Ages.

[3]Spanish Court Condominium Association II vs. Carlson (Illinois),” CAI Amicus Curiae Activity 2013.

tyranny of the AZ Senate: SB 1482 as SB 1454 redux

Yesterday I noticed that ARS shows the statutes as in Ch. 254 (SB 1454) that includes those found unconstitutional.  This is misleading to the average person as there is no annotation that the court ruled certain statutes unconstitutional.

The status of these unconstitutional statutes must be brought to the attention of the court if an attempt is made to enforce any of them.

I can understand the need to formally remove these statutes by repealing them through the legislative process. But, until and if then, keeping them on ALIS with no annotation on the official records is mind boggling.  The repeal is taking place within SB 1482, and the statutes are being replaced by almost exactly the same laws now shown in ARS.  What’s the point?  This is a win-win – pass the bill and minor changes to SB 1454 take place, kill the bill and the unconstitutional changes remain.

I believe it only proper that an annotation be placed in ALIS to alert the public as to the facts, and a separate bill filed that deals solely with the repeal of the unconstitutional statutes in SB 1454 in the event SB 1482 or a House version fails.  This repeal bill should have been introduced at the start of the session, as “unfinished business,” and passed without delay. To allow unconstitutional laws to remain on the books is unconscionable.

Please call this sorrowful state of affairs to the attention of your media contacts ASAP!