Restructuring HOAs case study supplement

The SCG case study is in preparation as a supplement to A Plan Toward Restructuring HOAs. This paper will be released soon. Here’s a peek:

Preface

For this case study, my objective was to advise the BOD of a $22 million revenues, 9,500 unit, active-adult community in Arizona as to its conduct in deciding difficult and controversial  issues.  I put my management/BOD skills to work and began the study. It is very important in the learning process to share recommendations with others, and to accept their constructive criticism. Readers can reject, modify, or remove recommendations. This approach sharpens one’s thinking and helps to make a more solid case for HOA reforms.

In regard to the SCG members at large, apathy — evidenced by silence or perhaps fear — prevailed as commonly found in HOA-Land. The vast majority of comments  to my posts on social media and elsewhere were irrelevant and without merit. They failed to address my messages concerning  violations of the laws and governing documents by boards of directors.   Rather, they focused on my HOA right or wrong, take it or leave it, and move out

 The necessary first step for democratic reforms, as proposed in A Plan Toward Restructuring the HOA Model of Governance, is the reorientation and reeducation of the pubic and especially boards of directors. Based on my experience I presumed that  they are uninformed and many prefer to remain uninformed; wrongly believing, and being led to believe,  that their HOA is  a wonderful country club instead of a legally binding contract between them and their HOA. 

The findings from this research reaffirmed this view of HOA directors and members regardless of income or education levels — they are highly uninformed about the legal and governmental issues of an HOA association. It seems that the  boards of directors over the years were and are heavily influenced by the Community Associations Institute’s teachings and programs.

Collectively referenced as the CAI School of HOA Governance  stemming from its focus on “large-scale associations,” such as SCG. Some 13 SCG members served as CAI members, including CAI presidents or directors, while serving as SCG’s presidents, directors, and committee chairs.  Its impact is devastating and cannot be underestimated.

This finding was very disappointing!  The behavior and conduct by the leadership displayed false and misleading information, an illusion of “no problems here,” and for the most part, silence. It supported the position of authoritarian and cult followers as maintained in the Plan’s view of the HOA Culture, and its description of the social and political dynamics at work in HOA-Land.

This Supplement is organized in time squence based on posts made to the HOA Contitutional Government website, including comments,  referencing or alluding to emails, to  the official Sun City Grand website’s News of the Day posts; and to posts and comments to social media websites: NextDoor (Desert Sage); Facebook’s Sun City Grand Members (AZ), closed by Administrator’ opposition; and Members of Sun City Grand AZ.

These exchanges are all reproduced as is, unedited except for  omissions of non-relevant sections.  In this manner, lacking audio-video materials, one can get a feeling of the message tones.

George K. Staropoli

February 14, 2022

Mgmt case study #1 – final update

By this time I believe some are beginning to realize the larger objective of my posts.  It’s about HOA-LAND, that collection of HOAs across America, and SCG was just a prime subject for study that provided detailed documentation.  Through acts of commission and of omission, by both the board of directors and the members in general, my research  was revealing.

Now that the board of directors meeting was held, without write-ins being allowed and no outcry of foul by the members,  I conclude my study of a failure to act in good faith that contained documented violations of state laws and the governing documents.

My case study showed that an HOA with members above average income and education  exhibited the same social and political dynamics of the prevalent HOA culture. It is a culture found throughout HOA-LAND that allows for the classification of HOA-LAND as a nation within America, consisting of independent principalities allowed to exist outside the Constitution.  In the face of demonstrable violations of the law and the governing documents, the silence by BODs and the majority of the members places HOA communities above the law as outlaw communities.

Although participation in  the SCG polls and focus groups was in the thousands, the failure of members to participate in my nonpolitical  “Values” poll  is indicative of the HOA Culture.  It is very disappointing, but not unexpected.  Early results do not show a heavy leaning for or against but a balanced response that I see as truthful, honest replies. Another failure by the members to accept criticism.

Check out the poll — it’s anonymous. https://www.surveymonkey.com/r/NF7FVR2

I was texted by a member who said this failure was due to fear on the part of members. She was partially right; fear is one aspect of the social dynamics of the HOA Culture in SCG.  Others texted asking, what does this prove and where are you going with this?  In a broader context, we are dealing with  simplified explanations by apathetic members.  Why is this so?

In my well founded argument of the social and political  dynamics at work included findings of the existence of:

  1. an authoritarian environment made possible by members’ authoritarian followers behavior. In short, trusting in authority figures. (It is in keeping with the increase in American authoritarianism);
  2. a cult-like behavior by members who religiously support the board of directors, who completely believe that the BOD can do no wrong, and who  will intently not discuss or debate the issues, but ready to attack and disparage the messengers (as found in cult followers);
  3. a “You can’t fight city hall” mentality stemming from the adhesion governing documents granting powers to the HOA and supported by pro-HOA statutes mimicking the governing documents in many ways (the practical ability to seek justice in the courts is subject to unattainable financial and emotional bars;
  4. a “I just don’t care” attitude by members who are in love with the amenities and benefits made possible by the HOA, and the means to that end doesn’t interest them;
  5. a fear in being rejected, ostracized, and socially distanced as “not one of us,” and “should move out if not happy here,” if critical or disagreeing with the prevailing views of the “establishment.”  Or, in other words, the equivalent of not being politically correct.

The making of this culture falls only partially on the members to the extent of their being all too willing to accept pro-HOA propaganda —  carefree living, affordable housing, resort style living etc.  CAI (Community Associations Institute) has for over 40 years 1) heavily influenced and dominated the formation of HOA-Land as an institution – accepted without question as that’s the way it is; and 2) conditioned and indoctrinated the public and members with its CAI School of HOA Governance (my label).  NO, that’s not the way it is!

This business trade group has advanced its mission to support its members, the attorney and manager “venders.”   Collectively, its program of education and acceptance can be found in its CAI Manifesto, which is a collection of all CAI documentation including town sponsored seminars and conferences,  court filings, and legislative testimony in  almost every state.

As I presented elsewhere, SCG has a “clique” of CAI members who, over the years,  are also or were SCG presidents and directors.  And their presence continues and can be seen on the BOD and as committee chairs today.

How SCG, and all HOAs, go forward depends on a proactive and involved membership, starting with reforming pro-HOA state laws and trickling down to conforming governing document revisions.

HOAs against protected member speech on social media

In contrast to the authoritative evidence supporting free speech for HOA members criticizing their BODs, the Tinnelly Law firm blog states up front in big letters, “HOA LAWYER BLOG.”  As for the content, the following quote sums up the view of the Tinnellys.

“The lack of regulation on social media communications can cause neighborhood tensions and smear the reputation of a community, causing a negative effect on property values.  This has led many homeowners associations to develop protocols and guidelines with regard to social media. “

(Some research shows Tinnelly is solid CAI with the owners, Richard and Stephen Tinnelly as members, as well as Director Acosta and article attribution to lawyer Kim.)

Read the full 4-page paper at social media free speech

The writing is on the wall for HOA reforms

Although the Arizona Supreme Court has not yet decided to hear Tarter v. Bend (CV 21-0049), my 44 page Pro Se amicus curiae brief is a matter of public record, regardless.  The case about a defamation suit by the HOA president, also an attorney and a limited-purpose public figure, raised constitutional issues of public speech with respect to questions of HOA governance. 

Selected excerpts follow.

As with the issue in Dombey (Dombey v. Phoenix Newspapers, Inc) . . . failing to present the question of Tarter’s status as a possible public figure denied the jury from considering the issues of protected free speech on public issues.

Kosor (NV) was sued on the basis of his criticism  and distribution of a pamphlet and letter at a board meeting seeking a seat on the board of directors.

“Because we conclude that each of Kosor’s statements was “made in direct connection with an issue of public interest in a place open to the public or in a public forum,” we reverse the district court’s decision to the contrary and remand for further proceedings consistent with this opinion.”

The impetus behind this view can be laid to the heavy lobbying of state legislators, judges, the public and the media by the Community Associations Institute (CAI). From its 2016 white paper,

“Most legislators do not thoroughly understand common-interest communities or who their patchwork legislation is actually protecting. . . . Legislative responses to individual constituents contribute to community associations being perceived as over-restrictive micro-governments focused on covenant enforcement.”

In response to my Arizona Supreme Court pro se amicus brief in Gelb v. DFBLS (CV-10-0371-PR) CAI attorney Jason Smith wrote,

“It is clear from the that the amicus curiae [referring to me] simply wants to impose constitutional protections on members in homeowners associations. The law has never supported that proposition.”

[I called to the Court’s attention a question of a SLAPP lawsuit against Brendt.]  The issue of an HOA SLAPP lawsuit against a member is in the interest of general public and of statewide importance, and also of national concern, the impact on community associations is certainly substantial. This Court should, sua sponte, consider Tarter’s legal action as a HOA politically motivated strategic lawsuit  against member participation.

I urge the Court to apply the long overdue correction  of  Plessy v. Ferguson by Brown v. Bd of Education to the long overdue and needed corrections to the unconstitutional HOA legal scheme.  As with Brown, America’s culture and environment has changed dramatically from 1964’s Homes Association Handbook and the formation in 1973 of Community Associations Institute (CAI) to deal with rising HOA problems and constitutional concerns after only 9 years. 

CAI’s early awareness of HOA constitutionality, public mini-government

It appears that CAI has adopted a “see no evil, hear no evil, speak no evil” attitude toward HOA constitutionality and public mini-government issues that are still prevalent today.  And it spread to the policy-makers.

Wayne S. Hyatt’s 1975 Emory Law Journal article, Condominium and Home Owners Associations:  Formation and Development, 2 years after the formation of CAI, presents his highly influential view on HOA constitutionality while recognizing that HOAs are mini-governments.

Wayne Hyatt “the most prominent advocate in CAI” serving as a 1975 “homeowners representative” and a former president (1978-79) (Privatopia, p. 219, 138 respectively). Hyatt  devoted his practice to working with developers of condominiums, master planned communities, resorts . . . to create community governance structures and community stewardship organizations.

While actively practicing law, he was also a member of 1) the American Law Institute (that wrote the pro-HOA Restatement of Servitudes, 2) the College of Community Association Lawyers (CAI affiliate) , the Community Associations Institute (CAI, created in 1973 by the National Association of Home Builders [grant of]  $30,000), and  3) ULI – the Urban Land Institute (sponsor of the 1964 “HOA bible,” The Homes Association Handbook) and served as a ULI Trustee.

He also served as an Advisor 1) to the Restatement of the Law (Third) Property: Servitudes, and 2)  to the Special Committees on a Uniform Condominium Act and a Uniform Planned Community Act of the National Conference of Commissioners on Uniform State Laws (Uniform Law Commission, UCIOA and UCA).  Hyatt received several awards from CAI.

Hyatt developed many of the Dell Webb’s master planned and resort/active adult association CC&Rs over the years.

His 1975 Emory Law Journal article gives readers a good idea of constitutionality and local government concerns that seemed to have evaporated over the years as CAI’s influence increased dramatically.  A few important excerpts:

  • “The California Code provides for an association and affords it the powers and duties of the mini-government.” {T]he [Georgia] legislature has in effect provided a large measure of home rule for what is in essence a category of small municipalities, and each has established a system of officers and directors in the nature of a mayor and council to oversee the exercise of this rule.” (At 988). 
  • “‘Has the state permitted, even by inaction, a private party to exercise such power over matters of a high public interest that to render meaningful’ constitutional rights, private action must be public?”(Footnote 33 at 983). [In simple terms, private government HOAs must be subject to local government protections].
  • “The Declaration is not a contract but, as a covenant running with the land, is effectively a constitution establishing a regime to govern property held and enjoyed in common.  It further sets forth procedures to administer, operate, and maintain the property. . . . the declaration and particularly the by-laws create not only a corporate structure but also a governmental authority that requires and deserves competent, experienced persons . . .” (at 990).
  • “The power of ‘levy’ is a distinctive characteristic of the association and removes it from a mere voluntary neighborhood group. . . . The imposition of penalties, whether fines . . . or a denial of use of facilities enforced by injunction, certainly represents quasi-judicial power to affect an individual’s property rights. . . . The possession and exercise of such power has substantial consequences with clear constitutional implications.  The courts have not yet considered a direct constitutional challenge to an association’s action.” (at 983).
  • “[T]he constitutional issue is most acute in rule enforcement; however the association’s established procedures, declaration, and by-laws should insure compliance with at least rudimentary constitutional principles, and there must be a procedure to protect members’ rights.” (at 984).

Nowhere will you find any equivalent discussion of HOA constitutionality, or HOAs as mini-governments or as a form of local public government. Not in its Manifesto, Community Next 2020 and Beyond (2016);  not in its Public Policies: Private Property Protection, Government regulation of Community Associations, and Rights and Responsibilities For Better Communities (July 15, 2021).

And not in any of its anti-constitution amicus briefs: Twin Rivers NJ appellate (2004), Dublirer NJ Supreme Court (2011);  Surowiecki, WA Supreme Court (2021) (business judgment rule overrides judicial review); Turtle Rock AZ appellate (2017); Foreshee WI appellate (2017).