THE  ALLEGORY  OF  THE  WIZARDS OF HOA-LAND

“Pay no attention to that man behind the curtain!”

The quote comes the classic film The Wizard of Oz. The Wizard of Oz tells the story of Dorothy (and her dog Toto) who is magically transported to the Land of Oz. Now, stuck in the Land of Oz she  is advised to see the Wizard of Oz as he may know of a way to send her home.  Speaking to the Wizard, who looks like a giant floating head, the floating head is exposed as just an illusion created by a middle-aged man hiding behind the curtain, who is the “real” Wizard. He attempts to distract them by asking them to ignore the man, saying “Pay no attention to that man behind the curtain.”  (View https://youtu.be/YWyCCJ6B2WE).

The ”Wizards of HOA-Land” are none other than the HOA boards of directors (BOD) who provide illusions of happiness, approval, and support by the majority of their members.  The BODs use propaganda statements — disinformation consisting of false, misleading, and half-truths —  videos, photos, testimonials, and coercion applied to non-believers in their message.

Speaking specifically in regard to my “Mgmt Case Study #1” subject, Arizona’s SCG, as a result of the BOD’s arrogance, its defensive posture using propaganda to create illusions of proper and righteous conduct, its silence on the crucial issues, and its continued violations of black-letter statutes and the governing documents, I’ve managed to pull away the “curtain” and expose the Wizards in action. The BOD’s response has been, in effect: Pay no attention to these criticisms and just believe in how we’ve made you all content with  SCG

The SCG BOD election  mockery

(In general, the legislators, the media, the HOA BODs and members need to step back and see the ugly forest through the trees — the claimed “isolated” incidents.)

And so the BOD, with some 30% of the votes already cast, continues to urge the members to vote.  Why?  Under SCG’s election procedure the winners are from the top 4 vote counts, and with more than 10% voting to avoid any quorum issues, why bother?  Would it really make a difference among 7 shades of gray candidates who, as I’ve pointed out elsewhere, have been carefully selected and controlled by the BOD with the result, no matter who won, of more of the same policies, attitudes, decisions, culture as before.  The independent voices of  the members have been denied.

A Committee for the Betterment of Sun City Grand  (CBSCG) is becoming a necessity for any hope of restoring member fundamental rights and freedoms.  The members must act!

Mgmt case study #1 – update3

SCG BOARD CONTINUES TO DEMONSTRATE THAT IT’S A ROGUE BOD

Management Case Study #1 update3 — BOD good faith conduct

George K. StaropoliJanuary 16, 2022

This study will proceed to a climax late this month with the board elections.  The BOD has remained silent with respect to the allegations and the members have also remained silent. However, the BOD has handled their problem with a campaign of propaganda.

I challenged the BOD and the members in a post to the SCG FB private member group, stating in part:

PROPAGANDA. I have studied the recent weekly posts, releases, enotifications, “news of the day” etc. from the BOD. My  conclusion was that I was witnessing a very slick and effective propaganda campaign.  (“Propaganda” is false statements, half-truths, omission of facts, and misrepresentations designed to produce a favorable attitude and mindset in the targets). What has been presented to the membership has been happy, smiling faces, eating good food at the Café, enjoying the club and sports amenities, and beautiful pictures of the landscaping. A picture of happy land and playing to the wishes, desires, and wants of the members.

All designed to elicit “what a great place this” and “what a great job the BOD is doing.”  I agree!  Meanwhile they have failed and continue to fail to address documented criticisms and charges of violations.  Completely ignoring these serious aspects of BOD duties and obligations under state law and the governing documents.  Will the new BOD follow in suit?  “For they are all, all honorable men.”

* * * *

Please feel free to provide posts on this open SCG member FB group: any  feedback, your views, any questions about me, who I am, what I stand for, or what I wish to accomplish. 

PLEASE ENTER MY NAME AS YOUR WRITE-IN NOMINEE FOR A CHANGE FOR THE BETTER: GEORGE K. STAROPOLI.

Management Case Study #1 – update1

Events at the HOA featured in this study continue to unfold. The board has been silent since the Dec. 16 email from the president. A question was addressed to the Executive Administrator of CAM asking whether or not she was in charge. The general manager (GM) had quit and there was no announcement whatsoever as to the status of CAM. She was listed on the staff of CAM, without any statement regarding the status of the GM.

In 2 days of this writing, Dec. 30, the SCG will hold a planned Q & A session where members can ask the BOD questions, sort of a townhall meeting. Would you advise the BOD to hold the meeting? If so, how should it deal with hard questions concerning its past performance?

January 2022 will see the campaign and election of board directors, and the right of members to write-in names of members not approved or subject to the SCG election and voting process. The BOD controls and approves the selection of “candidates” and regulates their campaign procedures — can they speak at clubs, what can be said, failure to attend a meeting disqualifies a potential candidate, etc.

A majority of the directors will be elected at this time, as a result of resignations, permitting an organized membership to gain control of the board. As in the case of our national politics, should the old BOD deny the results — as it seems to be the posture it is taking — or accept the reality of the vote?

Who’s in charge of the larger HOA? The BOD or CAI?

Over the years I’ve come to believe that the CAI member HOA attorney are really in charge and run HOAs, especially the larger ones where the money really is.  Its influence runs the gamut from its CAI School of HOA Governance,[1] to pervasive lobbying state legislatures, and its CAI Manifesto.[2] The manifesto is its “white paper,” 2020 and beyond, in which it advises its followers to influence state legislators and the courts.

QUOTE Most legislators do not thoroughly understand common-interest communities or who their patchwork legislation is actually protecting. Legislators too often shoot from the hip, passing laws that ricochet and cause collateral damage. And they will continue to do so in the future unless the CIC interests undertake vigorous lobbying and education programs and awareness campaigns to enhance their understanding.“[p. 7][emphasis added]. UNQUOTE

In 2016 CAI published its survey[3] of large-scale associations (LSA) that revealed some insights into the strength and dominance CAI attorneys who are involved with the policies and operations of LSA HOAs. CAI  defines these associations as having more than 1,000 lots with an operating budget  of $2,000,000 or more, and that “provide municipal type services.

QUOTECAI’s Large-Scale Managers (LSM) Committee . . . provides input on education curriculum, best practices, public policies related to management or operations of large-scale community associations, or identifying what is of value to the large-scale manager membership” [p. 2]. UNQUOTE

By “municipal type services,” CAI explains,

QUOTE “Many municipal governments viewed this new community housing concept as a means to transfer various public works and recreational responsibilities to a third party, which possessed the ability to assess property owners for the administration of these varied services.” UNQUOTE

The facts revealed

You may ask, so what has CAI really done or is this mere words? Based on CAI’s own data in the 2016 LSA survey, with only 94 respondents, readers can see the extent of CAI’s presence in these large scale HOAs — these master planned communities and these active-adult and retirement communities.  Reworking the data, the study revealed that 83.5% use an HOA attorney, which is not surprising for HOAs that can have as many as 9,000 homes or more and revenues that can reach upwards to $20,000,000.

Also not so surprising is that 92.5% of the HOA’s top leaders – president, CAM/COO — are CAI members in a strong case for conflict of interests.  As for senior staff, 64.9% are CAI members, and just 44.7% are on the BOD.  Understand that an HOA can have one or all three categories at the same time.

Consequences

I ask again, who runs the HOA, and where does the BOD’s advice come from if not from the teachings of the CAI School of HOA Governance? I suspect that the smaller the HOA the lower the percentages using an attorney or having CAI member HOA officials. The money isn’t there! 

This translates into follow the money that focuses legislators, the media, the political scientists, and the constitutional law think tanks on the LSA HOAs, treating the smaller HOAs as local nuisances. This is one good reason for failures in obtaining meaningful HOA reforms and even daily operational reforms.

References


[1] The foundation and principles of the School can be traced back to CAI’s Public Policies, The CAI Manifesto (its 2016 “white paper”), its numerous seminars and conferences, its Factbooks and surveys, its amicus briefs to the courts, and its advisories, letters, emails, newsletters, blogs etc. I have designated these foundations and principles collectively as the CAI School of HOA Governance.

[2]  Community Next: 2020 and Beyond (May 5, 2016).

[3] Large Scale Associations CAI study, 2016.

AZ Senate protects HOA misconduct rejecting HB 2052

The Arizona Senate is still sitting on HB 2052 since a month ago, March 1st,  a bill providing for member participation in HOA governance.  The bill  explicitly states, since the CC&Rs is seen as a contract, what the HOA cannot do and must allow for fair elections and meaningful  participation in HOA governance.

In the past I’ve addressed this constitutional question of fair elections in the HOA model of an authoritarian,  business form of governance.  I’ve provided examples of incidents and court cases reflecting this denial of fair elections, which exist in the public domain, as if the HOA is afraid of the democratic voice of its members.

In this writing I will call to your attention how an upscale, over 1,000 member HOA board — as a representative example of such HOAs — refuses to accept the facts laid before it that provide valid cause to conduct a due diligence examination; and to validate its positions in regard to its fiduciary obligations of good faith conduct and obedience to the governing documents.

Below I’ve copied parts of its application package provided to all candidates for  a director’s position. The package material clearly shows the BOD’s awareness of its fiduciary obligations and its required treatment with respect to the membership.

Obligations  and liabilities of directors

“Directors have a fiduciary duty to the Association and to each member.

“The duty of loyalty requires that:   Directors act in good faith  pursuant to a free, honest exercise of judgment not influenced by considerations other than the best interest of the Association.

“Failure to discharge the fiduciary duty can subject the Association to liability and subject the Director to personal liability. A Director can also be liable for illegal or tortuous acts of the Board of the Association if he/she participates in the decision to authorize the acts or knowingly fails to take steps to avoid the action. “[Emphasis added].

HOA control of the candidate process and campaigning

Getting down to the specific application of HB 2052, the relevant HOA’s candidacy procedures follow, with the opening line stating: “The Campaign and Election Policies have been carefully developed to provide a fair and clean process for candidates and all members.

While the specific policies are not clearly stated as whether prohibited or permitted, the overall tone is definitely of a prohibitive nature. The 14 points are shown as Exhibit 1 below. In sum, they include not using email listings; association facilities or agencies, clubs, etc. websites; no right to hold Q & A sessions independent of HOA;  no right to campaign through social media —  Facebook, Instagram, etc.; all advertising must be HOA approved; distributing flyers outside restaurants, presumably those within the HOA, or on common areas.

The policies of this HOA, and many other large-scale HOA are similar but not so detailed, demonstrate the failure of the board directors to act in good faith and as a fiduciary for the members.  For the HOA to argue that “The ends justify the means and we determine what’s good for the members, but the HOA entity comes first” is unsatisfactory and irrelevant. These policies reflect an authoritarian government that accepts the rejection of fundamental member democratic rights and privileges because they can hide behind the questionable legality of the CC&Rs.

There can be no excuse for HOA directors not being aware of the voluminous materials available for conducting their due diligence with respect to democratic, fair elections and member participation in HOA governance. They have been given plenty of notice, which subjects them to personal liabilities and prevents them from hiding behind “my attorney said it was OK,” or from acts of omission – doing nothing. 

This representative HOA’s policy so informs them of their liability. Yet, nothing is done to correct these violations of good faith. And still the directors, officers, and managers all demand respect! It’s shameless!

What is going on, you may ask?  Well, the board is setting policy for the acceptance of candidates without a vote of the membership. In other words, unless the proposed candidates are accepted by the BOD, the members have lost a candidate of their choosing. They have lost a meaningful participation in the governing of the HOA; they cannot disagree with the establishment!  So, if you thought your HOA was democratic, forget about it! 

Also, the BOD controls how candidates acceptable to them can campaign, placing severe restrictions not found in the fair public elections procedures.  See Exhibit 1 below. Again, members have lost their right to fair and free elections in HOA matters.

AZ Senate’s rejection of HB 2052

It is easily seen that  the AZ Senate supports these undemocratic polices as represented by this HOA’s practices. 

I have maintained that,

“Public policy today rejects constitutional government for HOAs allowing them to operate outside the law of the land. The policy makers have failed to understand that the HOA CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.”

See, CC&Rs are a devise for de facto HOA governments to escape Constitutional government; Reorienting the HOA board – fair elections; HOA Common Sense, No. 6: Fair and just hearings

And furthermore, “CIDS [HOAs] currently engage in many activities that would be prohibited  if they were viewed  by the courts as the equivalent of local federal amd Arizona governments.”  … Privatopia (1994), Evan McKenzie.

It is not too late for the Senators to meet their obligations to uphold the federal and Arizona Constitutions by passing HB 2052 into law.

Exhibit 1. HOA BOD campaign policies.

  1. Using email listings, electronic or websites of Neighborhood Representatives and Alternates, Charter Clubs, Interest Groups, community and specialty groups.
  2. Addressing a formal . . . Group (e.g., Neighborhood Representative, Charter Club, Interest Group, specialty group meetings, sports venues, etc.). However, a person’s right to free speech in casual conversations shall not be restrained.
  3. Participating in formal Q&A sessions and programs other than those sponsored by the . . . Election Team.
  4. Using Association facilities for campaign events for individual candidates.
  5. Removing other candidates’ campaign flyers from approved locations.
  6. Using the official . . . website, Facebook or Instagram social media accounts to promote your campaign or to use your personal social media accounts to defame or incite defamation of candidates, engaging in unkind innuendoes / slander / harassment at any time or in any setting.
  7. Posting campaign flyers on street signs, trees, light poles, motor vehicles, golf cars, lawns, windows, auto windshields, or in commercial buildings.
  8. Defacing approved campaign flyers.
  9. Using balloons, buttons, t-shirts, marked-up election ballot, etc. as campaign tools.
  10. Using advertising of any type (other than approved campaign statement and/or approved personal correspondence).
  11. Using multiple versions of campaign flyers at the same time.
  12. Placing flyers in mailboxes (against the law).
  13. Distributing campaign flyers outside the entrance of or in the restaurants.
  14. Distributing campaign flyers in common areas except as noted.