Introduction
This 2-part Commentary on the H-O-A amendment boilerplate process entails a number of complex constitutional issues that are interlinked. Discussing one results in discussing another, etc. in order to fully understand the validity of the H-O-A legal scheme. [quote — ]You can’t see the forest for the trees[ –unquote ] is the result of this complexity obfuscated by the Restatement and by the national pro-H-O-A special interest lobbyists.
In Part 1 I discussed 5 selected views by the appellate court that I see as constitutional challenges. Herein Part 2 I present constitutionality challenges in regard to 1) the bias found in the Restatement of Servitudes,[1] a legal authority on court decisions and common law in favor of the H-O-A legal scheme, and 2) the freedom to contract doctrine[2] and its bearing on whether people are truly free to enter an H-O-A private government contract.
The Arizona appellate court ruling in Nicdon v. Desert Mountain[3] with respect to a CC&Rs amendment needs to be appealed to the AZ supreme court. In Part 1, I raised the question of an on color of law denial of fundamental rights to property; on violations of the equal protection of the laws.
Disclaimer: Understanding that in spite of my 20+ years reading hundreds of federal and state supreme court and appellate court opinions, I am not a lawyer nor am I employed by a lawyer; I only offer my views.
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Restatement of Property: Servitudes
In Item 5 of Part 1, I raised my concern that the Court relied on the Restatement of Servitudes quoting, [quote — ]A restrictive covenant is generally valid unless it is illegal or unconstitutional or violates public policy[ –unquote ].[4] The Restatement (American Law Institute) is accepted as legal authority even though it seems to be advancing ought to be or societal goals rather than reporting the law and factual court decisions.
[quote — ]The Institute’s mission is [quote — ]to promote the clarification and simplification of the law and its better adaptation to social needs, to secure the better administration of justice, and to encourage and carry on scholarly and scientific legal work.[ –unquote ] It achieves this goal through the development of Institute projects, which are categorized as Restatements, Codes, or Principles. . . . Restatements are primarily addressed to courts and aim at clear formulations of common law and its statutory elements, and reflect the law as it presently stands or might appropriately be stated by a court.[ –unquote ][5]
The opening sentence above is the heart of the problem. It presumes that justice is accomplished through ALI’s promotion of current court decisions, which in turn, are the reflection of a bias as to what constitutes [quote — ]a better adaption to social needs.[ –unquote ] It flies in the face of long standing constitutional doctrine on the legitimacy of the law and the consent of the governed. It opens up to the controversy regarding the extent to which people may associate and establish contracts under freedom to and freedom of contract.
This 2000 update and marked rewrite began in 1987, 13 years ago. It is now another 21 years of substantive changes in the laws and public policy; H-O-As have now been institutionalized and accepted as [quote — ]this is he way it is.[ –unquote ] This is quite clear from the Forward (emphasis added):
[quote — ]Professor Susan French [Reporter (chief editor/contributor) for this Restatement] begins with the assumption . . . that we are willing to pay for private government because we believe it is more efficient than [public] government . . . . Therefore this Restatement is enabling toward private government, so long as there is full disclosure . . . .[ –unquote ]
And we know there is an absence of full disclosure that amounts to misrepresentation. Sadly, there is evidence of contradictory statements aiding and abetting this misrepresentation even in the Restatement that is used as legal authority by the courts. While the Court quoted comment a of §3.1[6] (see [quote — ]Contractual freedoms[ –unquote ] below), it omitted comment h, which reads, [quote — ]in the event of a conflict between servitudes law and the law applicable to the association form [its private contractual nature], servitudes law should control.[ –unquote ]
In addition, while the court referenced §6.10 it unbelievably failed to reject §6.13, comment a, which states: [quote — ]The question whether a servitude unreasonably burdens a fundamental constitutional right is determined as a matter of property law, and not constitutional law.[ –unquote ]
Need I say more about securing the [quote — ]better administration of justice[ –unquote ]? Certainly not for the affected people — the H-O-A homeowners. ALI is guilty of bias against the homeowners, the [quote — ]patients,[ –unquote ] as analogous to the medical profession with its high degree of specialization where, working on the same body, the left hand doesn’t know about, or doesn’t care about, what the right hand is doing at the same time.
If it is true and believable that laws are to provide justice, as widely proclaimed, the courts and the lawmakers must consider the effects of both hands on the patient. ALI must adjust its approach and remove these pro-H-O-A views and make references to applicable constitutional law. ALI must also recognize that H-O-As are another form of local government that is not subject to the Constitution, and remove §6.13, comment a.
The policy makers have failed to understand that the H-O-A CC&Rs have crossed over the line between purely property restrictions to establishing unregulated and authoritarian private governments.
Section 6 of the Restatement, Part D, Governance of Common – Interest Communities, attempts to deal with the governance of H-O-As in general. Section 6.16 addresses representative government. It does not read at all like the Declaration of Independence, the Constitution, or the Bill of Rights.
Contractual freedoms and consent to be bound
Let’s begin with the excerpt from Desert Mountain opinion in Part 1(1) linking the binding of the CC&Rs [quote — ]contract[ –unquote ] by deed acceptance to the implicit consent to be bound in a single quote (emphasis added),
[quote — ]By accepting a deed in the Desert Mountain planned community, the [homeowner] became bound by the Declaration, including properly adopted amendments. . . . when [a] homeowner takes [a] deed containing restriction allowing amendment by majority vote, homeowner implicitly consents to any subsequent majority vote to modify or extinguish deed restrictions[ –unquote ].
By this doctrine, contract law 101 is ignored in favor of servitude law, as the Restatement advises and an implicit waiver and surrender of a fundamental property right is accepted as valid, thereby treating the homeowner as a second-class citizen. It does not do justice for the homeowner and should be held as an illegitimate exercise of police power by the legislature.
In Item 5 of Part 1, I also raised the matter of the freedom to contract doctrine as contained in comment (a) of the Restatement’s §3.1 that I now discuss in some detail here due to its constitutional complexity.
‘‘In general, parties may contract as they wish [freedom to contract] , and the courts will enforce their agreements without passing on the substance . . . The principle of freedom of contract is rooted in the notion that it is in the public interest to recognize that individuals have broad powers to order their own lives.’[ –unquote ]
In opposition to the above, I raised the following questions years ago in 2005,
[quote — ]When did ‘whatever the people privately contract’ dominate the protections of the U.S. Constitution? Please state what, if any, are the government’s interests in supporting H-O-As that deny the people their constitutional rights?[ –unquote ]
I have not received an answer from any party including constitutional think tanks, state legislators, attorney generals, or the media. It’s obvious that in any reply they [quote — ]would be defending the indefensible![ –unquote ]
Freedom to contract; implied consent to be bound
The simplistic argument that remaining in the H-O-A implies consent is answered, in general, by political scientist, professor of constitutional law, and author Randy Barnett,
Simply remaining in this country, however, is highly ambiguous. It might mean that you consent to be bound by the laws . . . or it might mean that you have a good job and could not find a better one [elsewhere] . . . or that you do not want to leave your loved ones behind. It is simply unwarranted that to conclude from the mere act of remaining . . . that one has consented to all and any of the laws thereof.[ –unquote ][7]
I broadly address the consent issue in H-O-A Common Sense, No. 4: Consent to be governed[8] (2008). A deeper discussion can be found in H-O-A consent to agree vs. [quote — ]the will of the majority[ –unquote ] (2019) wherein I quote constitutional scholars Randy Barnett, Keith E. Whittingham, and Edwin Meese.[9]
The important, selected, noteworthy quotes shown below bear directly on the defects in the top-down, take it-or leave it CC&Rs:
[quote — ]Tacit consent purports to provide a rationale for obligating those of us, by chance or choice, have not made their approval of the government explicit [Whittingham].[ –unquote ]
[quote — ]The [quote — ]consent of the governed[ –unquote ] stands in contrast to [quote — ]the will of the majority[ –unquote ] . . . consent is the means whereby arbitrary power is thwarted [Meese].[ –unquote ]
[quote — ]A law may be ‘valid’ because it was produced in accordance with all the procedures required by a particular lawmaking system, [the H-O-A amendment procedure, for example] but be ‘illegitimate’ because these procedures were inadequate to provide assurances that a law is just’ [Barnett].[ –unquote ]
US Supreme Court must decide
I have informed readers about the sticky-wicket that ties all these constitutional questions together as applied to the H-O-A legal structure and scheme; a sticky-wicket that must be resolved once and for all by the US Supreme Court.
References
[1] Restatement (3rd), Property: Servitudes, Susan F. French, Reporter, American Law Institute (2000).
[2] The question of [quote — ]legitimacy of consent[ –unquote ] is explored by Randy Barnett in his publications where he argues that there are limitations. Restoring the Lost Constitution: The Presumption of Liberty, Randy E. Barnett, Part 1, Princeton University Press, 2004).
[3] Nicdon v. Desert Mountain, No. 1 CA-CV 20-0129 (April 29, 2021).
[4] Supra n.1, §3.3(1).
[5] [quote — ]How the Institute Works,[ –unquote ] American Law Institute (ALI),website (May 3, 2011).
[6] This section of the Restatement, Validity of Servitude Arrangements, speaks to unconstitutional servitudes (§3.1(d)) and servitudes violating public policy (3.1(e)). Worth reading.
[7] Supra n.3, p.19.
[8] See H-O-A Common Sense: rejecting private government (2008) pamphlet on Amazon.
[9] Barnett, supra n. 3; Whittingham, [quote — ]Chapter 5, Popular Sovereignty and Originalism,[ –unquote ] Constitutional Interpretation, Univ. Press of Kansas (1999); Meese, [quote — ]What the Constitution Means,[ –unquote ] The Heritage Guide to the Constitution (2005). Meese was the US Attorney General under Ronald Reagan.
HOA Constitutional Government 